Chalayyam Travels & Transporters v. Indian Rare Earths Limited & Ors.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN** **MONDAY, THE 31[ST] DAY OF JANUARY 2022 / 11TH MAGHA, 1943** ## **W.P.(C) NO.490 OF 2022** ## **PETITIONER:** **CHALAYYAM TRAVELS & TRANSPORTERS, S V M P O, KOZHIKODE, KARUNGAPALLY -690 518, REPRESENTED BY ITS PROPRIETOR, AKBER BIN KALAM, AGED 30 YEARS, S/O ABDUL KALAM, CHALAYYAM DALE, SVM P O, KOZHIKODE, KARUNAGAPALLY-690 573.** **BY ADVS. V.V.NANDAGOPAL NAMBIAR SMITHA (EZHUPUNNA) DHEERAJ KRISHNAN PEROT CHITRA JOHNSON** ## **RESPONDENTS:** - **1 THE HEAD, INDIAN RARE EARTHS LIMITED, CHAVARA, KOLLAM-691 583.** **2 INDIAN RARE EARTHS LIMITED, CORPORATE OFFICE, PLOT NO.1207, VEER SAVARKAR MARG, NEAR SIDDHI VINAYAK TEMPLE, PRABHADEVI, MUMBAI-400 028, REPRESENTED BY ITS CHAIRMAN AND MANAGING DIRECTOR.** - **3 GOVERNMENT E-MARKET PLACE(GEM) REPRESENTED BY ITS BUISNESS FACILITATOR (KERALA), MANESH MOHAN, GEM INDIA LIMITED, P-2 CONNAUGHT CIRCUS, NEW DELHI DL 00 00 00 IN(MANESH.MOHAN@INTELLECTDESIGN.COM)** **4 J. FELIX BABU, NEENDAKARA 1/45, ANNAS LAND, KARITHURA, NEENDAKARA, KOLLAM-691 583.** **W.P.(C) NO.490 OF 2022** -2- *** ADDL.R5 DEEPTHI TRANSPORT SERVICE, IRE ROAD, VADAKKADAM BUILDING, CHAVARA P.O., KOLLAM DISTRICT-691 583, REPRESENTED BY ITS MANAGING PARTNER MR.CALLISTUS AZCHRIA, AGED 63 YEARS, S/O.ZACHIRIA, RESIDING AT VADAKKADATHU VEEDU, KARITURA, CHAVARA P.O., KOLLAM DISTRICT, PIN-691 583.** *** (ADDITIONAL R5 IS IMPLEADED AS PER ORDER DATED 14-01-2022 IN I.A. NO.1/2022.** **BY ADVS. M.GOPIKRISHNAN NAMBIAR ENOCH DAVID SIMON JOEL DENU JOSEPH K.JOHN MATHAI JOSON MANAVALAN KURYAN THOMAS PAULOSE C. ABRAHAM RAJA KANNAN S.SREEDEV RONY JOSE SUZANNE KURIAN CIMIL CHERIAN KOTTALIL** **SRI.S.MANU, ASGI SMT.RAMOLA NAYANPALLY, SC** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.P.(C) NO.490 OF 2022** -3- ## **P.V.KUNHIKRISHNAN, J.** **----------------------------------------------W.P.(C) No.490 of 2022** ## **----------------------------------------------Dated this the 31[st] day of January, 2022 -----------------------------------------------** ## **JUDGMENT** The above writ petition is filed with the following prayers:- “a) Issue a Writ of mandamus or any other appropriate writ, order or direction compelling the respondents Nos.1 and 2 to consider the bid submitted by the petitioner pursuant to Exhibit P2 and award the work to the petitioner. b) Issue a Writ of mandamus or any other appropriate writ, order or direction commanding the respondent to keep in abeyance all further proceedings pursuant to Exhibit P2 and execution of work therein. c) to direct the 3[rd] respondent to update/correct the profile of petitioner by incorporating correct details provided by the petitioner, in particular, entry relating to MSME, in the profile maintained by the 3[rd] respondent and consider the bid submitted by the petitioner in accordance with law. d) To hold that the petitioner is entitled for the bid as per Exhibit P2 on the basis of pre-qualification and price bid submitted to respondents Nos.1 and 2. e) To set aside the work order, if any, awarded to the 4[th] respondent pursuant to Exhibit P2 proceedings. **W.P.(C) NO.490 OF 2022** -4- f) To direct the respondents to act in strict adherence to the provisions to MSME Act and Rules considering Exhibit P1 and prior registrations of the petitioner proprietorship as MSME and to grant all rights, privileges and benefits conferred by Act to the petitioner.” 2. The petitioner is a registered MSME. According to the petitioner, he is the lowest bidder in Ext.P2 tender proceedings. It is also the case of the petitioner that they uploaded MSME registration and all required testimonials along with the bid documents. It is further stated that the petitioner had successfully qualified the techno-commercial bid. Thereafter, the price bid was opened by the 1[st] respondent with three eligible bidders. It is stated in the writ petition that, among the three eligible bidders, the petitioner proprietorship stands as L1(1[st] lowest). The grievance of the petitioner is that the respondents have not considered the petitioner's bid under the category of MSME citing a clerical mistake emerged from the part of the 3[rd] respondent at the time of registering in the GEM portal. GEM portal seeks to indicate in the relevant column whether the bidder comes under MSME category or not by marking it as either 'applicable' or 'not applicable' in the relevant column. It is **W.P.(C) NO.490 OF 2022** -5- the case of the petitioner that by an inadvertent technical mistake, the officials of the GEM has marked as 'Not applicable' in the MSME category column instead of marking it as 'Applicable'. It is also stated that the 1[st] respondent started inviting tender through GEM portal way back from March, 2021. Petitioner's profile is registered with the GEM portal. It is also the case of the petitioner that they had bagged four contracts of the 1[st] respondent through GEM portal for the last nine months as MSME. It is the definite case of the petitioner that the attempt of the respondents is to eliminate the petitioner and to award contract to the 4[th] respondent with malafide intention and to favour the 4[th] respondent. Hence this writ petition. 3. I heard the counsel for the petitioner and the Standing Counsel for the 1[st] and 2[nd] respondents. I also heard the counsel appearing for the 4[th] and 5[th] respondents. 4. The counsel for the petitioner reiterated his contention. 5. The counsel for the petitioner takes me through Ext.P2 and the relevant clauses in it. The counsel also submitted **W.P.(C) NO.490 OF 2022** -6- that the mistakes crept in the bid document is already corrected by the 3[rd] respondent. The counsel also submitted that the relevant documents to substantiate that the petitioner is an MSME is already uploaded along with the bid documents. That itself shows that the error committed was a mistake. The counsel submitted that the action of the 1[st] and 2[nd] respondents in rejecting the bid of the petitioner is illegal. The counsel for the petitioner also relied on the judgment of the Apex Court in **Deputy Commissioner, Kendriya Vidyalaya Sangathan and others v. J. Hussain [2013 KHC 4716]** .The counsel for the 5[th] respondent also supported the case of the petitioner. The counsel also relied the above judgment to substantiate their case. The counsel appearing for 1[st] and 2[nd] respondents takes me through the counter affidavit filed by the 1[st] and 2[nd] respondents. The counsel submitted that the petitioner is now in essence sought to modify his bid and alter the MSME status as 'not applicable' to 'applicable'. The counsel also submitted that it is impermissible in law. The counsel submitted that the petitioner cannot be permitted to alter his bid/submissions after **W.P.(C) NO.490 OF 2022** -7- making it. It is the submission of the counsel that, it would amounts to granting the petitioner an unfair advantage. The counsel also submitted that it is well settled that a writ petition cannot be permitted to modify its offer in exercise of the powers under Article 226 of the Constitution of India. 6. I have considered the contention of the petitioner and the respondents. It is an admitted fact that the work is now allotted to the 4[th] respondent and the 4[th] respondent has already started the work. This Court as per order dated 14.01.2022 observed that the work, if any, allotted to the 4[th] respondent will be subject to the result of the writ petition. It is the case of the petitioner that when the bid documents are uploaded, there was an inadvertent technical mistake from the officials of the GEM. The counsel submitted that it is already corrected by the 3[rd] respondent. This is disputed by the counsel for the 1[st] and 2[nd] respondents. It will be better to extract the relevant portion of the counter affidavit filed by the 1[st] and 2[nd] respondents. Paragraphs 15 to 21 of the said counter affidavit read thus; “15) In the above background, it is submitted that the Petitioner and two other entries participated in Exhibit P2 **W.P.(C) NO.490 OF 2022** -8- tender and submitted their technical and financial bids through the GeM portal. 16) While submitting the bids through GeM portal, the bidders are given an option of choosing/opting the benefits granted to MSMEs. If the MSME bidder selects the MSME status as 'not applicable', it is treated as an ordinary bidder. 17) On opening the technical bids and the price bids, it was seen that though the petitioner was L1, it had not sought to avail the price benefits granted to MSMEs. The petitioner did not opt for availing the benefits granted to MSEs by marking its MSE status as “Not Applicable” to it. A true copy of the screenshot of the GeM portal reflecting the MSE status of the Petitioner is produced herewith as Exhibit R1(c). 18) The petitioner has attempted to mischaracterize this omission on its part as 'inadvertent technical mistake' made by the 'officials of the GeM' and that the 'mistake is not attributable on the Petitioner'. This is completely and totally incorrect and is nothing but an attempt to mislead this Hon'ble court. In this regard it is submitted that a) The 3[rd] Respondent does not make any entries in the bids. It is the Petitioner who has to enter all the details in the GeM portal. The Petitioner in this case has deliberately opted not to avail the price preference granted to MSEs. **W.P.(C) NO.490 OF 2022** -9- b) Having opted to not to avail the benefits, and the price and technical bids having been opened, the Petitioner cannot at this juncture take the defense of the non-selection being a 'technical mistake'. c) The other two bidders opted to avail the benefits granted to MSEs and uploaded the requisite documents. Therefore, their MSE status is reflected clearly. This shows that there wasn't any technical glitch. d) This Petitioner personally admits to the 2[nd] Respondent Company that he had “inadvertently entered in the provisions for price preference policy for MSME as “Not applicable” merely because of a clerical mistake.” A true copy of the Petitioner's letter dated 18.12.2021 to Indian Rare Earths Ltd. is produced herewith as Exhibit R1(d). 19. It was seen that the 4[th] Respondent's financial bid fell within the price band of L1+15%. 20. Accordingly, and in terms of the procurement policy for MSEs as per Exhibit R1(a) order dated 23.03.2012 and the specific conditions in Exhibit P2 tender document that 'MSE quoting price within price band L1+15% **may be awarded for full/complete supply of total tendered value** to MSE, considering spirit of policy for enhancing the Govt. procurement **W.P.(C) NO.490 OF 2022** -10- from MSE”, the tender for the complete work was awarded to the 4[th] Respondent. A conteact was accordingly, executed between the 4[th] Respondent and the 2[nd] Respondent Company on 01.01.2022. A true copy of the contract executed between the 2[nd] Respondent Company and the 4[th] Respondent is produced herewith as Exhibit R1(e). 21. It is further submitted that the Petitioner has in essence sought to modify his bid and alter the MSE status from “Not Applicable” to Applicable”. This is impermissible in law. The Petitioner cannot be permitted to alter his bid/ submissions after making it .That would amount to granting the petitioner an unfair advantage. Indeed, it is well settled that a writ petitioner cannot be permitted to modify its offer in exercise of powers under Article 226 of the Constitution of India.” 7. According to the petitioner, the petitioner’s tender was rejected without giving an opportunity of hearing. The counsel for the petitioner submits that, if the petitioner was given an opportunity, he may be able to convince the authorities that the rejection of the tender is illegal and it was actually an inadvertent technical mistake committed by the 3[rd] respondent. The counsel for the petitioner takes me through the judgment of ## **W.P.(C) NO.490 OF 2022** -11- ## the Apex Court in **Deputy Commissioner, Kendriya Vidyalaya Sangathan's case (supra)** . 8. I do not want to make any observation about the merit of the case. According to the petitioner, no opportunity was given to the petitioner before rejecting his tender. If that is the case, according to me, the petitioner can be given opportunity to submit their grievance before the 1[st] and 2[nd] respondents. There can be a direction to the 2[nd] respondent IREL (India) Ltd to consider Ext.P4, after giving an opportunity of hearing to the petitioner and other aggrieved parties. There can be a time limit for consideration of Ext.P4 also. The allotment of the work to the 4[th] respondent will be subject to the result of the decision in Ext.P4. Therefore, this writ petition is disposed in the following manner:- i) The 2[nd] respondent IREL (India) Ltd is directed to consider Ext.P4 representation, as expeditiously as possible, at any rate, within two weeks from the date of receipt of a copy of this judgment. ii) The 2[nd] respondent IREL (India) Ltd will give an opportunity of hearing to the petitioner and other affected parties before passing final orders in it. The hearing can **W.P.(C) NO.490 OF 2022** -12- be either virtually or physically. iii) All the contentions raised by the petitioner in this writ petition are left open and the petitioner is free to raise all those contentions before the 2[nd] respondent. iv) The petitioner is free to produce a copy of this judgment along with a copy of the writ petition and other additional documents, if any, before the 2[nd] respondent for compliance. v) The petitioner is free to file additional representation also before the 2[nd] respondent. Sd/- **P.V. KUNHIKRISHNAN JUDGE** bpr -13- ## **W.P.(C) NO.490 OF 2022** ## **APPENDIX** ## **PETITIONER'S EXHIBITS** **EXHIBIT P1 TRUE COPY OF THE MSME REGISTRATION CERTIFICATE ISSUED BY THE MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES. EXHIBIT P2 TRUE COPY OF THE BID DOCUMENT DATED 10.11.2021. EXHIBIT P3 TRUE COPY OF THE WORK ORDER DATED 22.11.2021 ISSUED IN FAVOUR OF THE PETITIONER (RELEVANT PAGES) EXHIBIT P4 TRUE COPY OF THE REPRESENTATION DATED 08.12.2021. EXHIBIT P5 TRUE COPY OF THE MAIL DATED 29.11.2021 ADDRESSED TO M/S DEEPTHI TRANSPORTS. EXHIBIT P6 TRUE COPY OF THE EMAIL DATED 25.11.2021. EXHIBIT P7 TRUE COPY OF THE MAIL RECEIVED ON 01.12.2021. RESPONDENTS' EXHIBITS** **EXHIBIT R1(A) TRUE COPY OF THE ORDER DATED 23.03.2012 ISSUED BY THE MINISTRY OF MICRO, SMALL & MEDIUM ENTERPRISE (WITHOUT THE ANNEXURES). EXHIBIT R1(B) TRUE COPY OF THE OFFICE MEMORANDUM DATED 24.10.2016 ISSUED BY THE OFFICE OF THE DEVELOPMENT COMMISSIONER (MICRO, SMALL & MEDIUM ENTERPRISES), MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES ALONG WITH THE FREQUENTLY ASKED QUESTIONS.** ## **W.P.(C) NO.490 OF 2022** -14- |**EXHIBIT R1(C)**|**TRUE COPY OF THE SCREENSHOT OF THE GEM**| |---|---| ||**PORTAL REFLECTING THE MSE STATUS OF**| ||**THE PETITIONER.**| |**EXHIBIT R1(D)**|**TRUE COPY OF THE PETITIONER'S LETTER**| ||**DATED 18.12.2021 TO THE RESPONDENTS**| ||**1 & 2.**| |**EXHIBIT R1(E)**|**TRUE COPY OF THE CONTRACT EXECUTED**| ||**BETWEEN THE 2ND RESPONDENT COMPANY AND**| ||**THE 4TH RESPONDENT DATED 01.01.2022.**|