JOHNSENT T. AGED 54 YEARS S/O. THENKAYYAN, CONTRACTOR, KRIPA BHAVAN, CHAKKALAVILA, IRUMBIL, ARUVIPURAM P O, NEYYATTINKARA-VIA, THIRUVANANTHAPURAM DISTRICT. v KERALA AGRICULTURAL UNIVERSITY and OTHERS

_**WP(C).No.1989/2020**_ 1 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** **THURSDAY, THE 25TH DAY OF JUNE 2020 / 4TH ASHADHA, 1942** ## **WP(C).No.1989 OF 2020(W)** ## **PETITIONER/S:** **JOHNSENT T. AGED 54 YEARS S/O. THENKAYYAN, CONTRACTOR, KRIPA BHAVAN, CHAKKALAVILA, IRUMBIL, ARUVIPURAM P O, NEYYATTINKARA-VIA, THIRUVANANTHAPURAM DISTRICT.** **BY ADV. SRI.BABU JOSEPH KURUVATHAZHA** ## **RESPONDENT/S:** - **1 KERALA AGRICULTURAL UNIVERSITY (KAU) KAU P O, VELLANIKKARA, THRISSUR-680656, REPRESENTED BY ITS REGISTRAR.** - **2 VICE CHANCELLOR KERALA AGRICULTURAL UNIVERSITY, KAU P O, VELLANIKKARA, THRISSUR-680656.** - **3 DIRECTOR OF PHYSICAL PLANT, DIRECTORATE OF PHYSICAL PLANT, KERALA AGRICULTURAL UNIVERSITY , KAU P O, VELLANIKKARA, THRISSUR680656.** - **4 BINDUL KRISHNAN C U DWARAKA, V V NAGAR-41, NCC ROAD, AMBALAMUKKU, PEROORKKADA P O, THIRUVANANTHAPRUAM-695005.** **R1-3 BY SRI.AJITH KRISHNAN, SC, KERALA AGRICULTURAL UNIVERSITY** ## **OTHER PRESENT:** **SC FOR R1 TO R3 SURYA BINOY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19-06-2020, THE COURT ON 25-06-2020 DELIVERED THE FOLLOWING:** ## **V.G.ARUN, J. ----------------------------------------------W.P(C).No.1989 of 2020 ----------------------------------------------Dated this the 25[th] day of June, 2020** ## **JUDGMENT** The petitioner, a civil contractor, had participated in the tender conducted by the 1st respondent University, in pursuance of Exhibit P1 Notice Inviting e-Tender dated 26.10.2019. The work notified for tender was the balance construction work of the P.G Hostel for ladies at the College of Agriculture, Vellayani. Petitioner and three others participated in the tender. After evaluation, the bid submitted by the petitioner was found to be acceptable, since the petitioner alone had the requisite qualification. The bid submitted by the 4th respondent was rejected for the reason that he did not produce certificate to prove experience of having executed similar structure works of not less than Rs.75 lakhs within the last five years. In spite of the petitioner being the sole qualified bidder, the Works Committee of the University decided to retender the work. Accordingly, Exhibit P3 dated 3.1.2020 was issued, with similar conditions and specifications as in Exhibit P1. The petitioner and the 4th respondent again submitted _**WP(C).No.1989/2020**_ 3 their bids and the bid submitted by the 4th respondent was accepted, as evidenced by Ext.P7. The writ petition was thereupon filed challenging the award of contract to the 4th respondent, mainly on the ground that the 4th respondent did not have the requisite experience of having executed similar framed structure works of not less than Rs.75 lakhs within the last five years. The prayers in the writ petition are to quash Exhibit P7, to the extent of accepting the bid of the 4th respondent and to direct respondents 1 to 3 to award the work notified under Exhibit P3 to the petitioner. While admitting the writ petition on 14.1.2020, this Court issued an interim order, making the further proceedings subject to the result of the writ petition. 2. In their counter affidavit, respondents 1 to 3 have stated that only the petitioner and the 4th respondent submitted bids pursuant to Exhibit P3. The bids were opened on 20.1.2020 and the tender of the 4th respondent was accepted, he being the lowest bidder having the requisite experience. Though, selection notice was issued on 21.1.2020, the 4th respondent informed the University that he was not in a position to take up the work due to financial difficulties. Thereupon, the petitioner, the sole remaining bidder, was asked about his willingness to execute the work at the accepted rate of the default bidder. The petitioner expressed willingness to execute the work at 1% below estimate rate and a decision was taken by the University to retender the work again. Accordingly, Exhibit P13 notice dated 19.3.2020 _**WP(C).No.1989/2020**_ 4 has been issued. Item No.11 in Exhibit P13 is the work originally notified under Exhibits P1 and P3. 3. Heard Sri.Babu Joseph Kuruvathazha, learned counsel for the petitioner and Ms.Surya Benoy representing Sri.Robson Paul, the learned Standing Counsel for the respondents. 4. Learned counsel for the petitioner contends that, the sequence of events leading up to Exhibit P13 reveals a deliberate attempt on the part of the University to avoid awarding of the work to the petitioner. It is the further submission of the learned counsel that, issuance of Exhibit P13 during the pendency of the writ petition, particularly in the light of the interim order issued by this Court, amounts to contempt. It is submitted that the challenge against award of the work to the 4th respondent has to be decided on merits, even though the 4th respondent did not accept the offer. The learned counsel points out that, if the award of work to the 4th respondent pursuant to Exhibit P3 is found to be bad, the petitioner would become entitled to be awarded the contract at the rate quoted by him. 5. In elaboration of the submission regarding disqualification of the 4th respondent, the learned counsel drew attention to the conditions in Exhibits P1 and P3. As per the conditions in Ext. P1, one of the documents to be submitted by the bidder is copy of experience certificate showing execution of similar framed structure works of not _**WP(C).No.1989/2020**_ 5 less than Rs.75 lakhs within the last five years. Exhibits P5 to P6(b) are the experience certificates produced by the 4th respondent along with his tender documents. Exhibits P5, P6 and P6(b) being certificates pertaining to works of less than Rs.75 lakhs value, cannot be taken into consideration. Exhibit P6(a), dated 25.11.2019, is the certificate issued by the Executive Engineer of the Kerala State Housing Board certifying the 4th respondent to have satisfactorily completed the piling work in connection with the construction of four blocks (six storeyed) of a residential scheme, totalling an amount of Rs.1,25,00,000/-. It is also stated that the total estimate for the work is Rs.6,00,00,000/-. The learned counsel for the petitioner contends that the experience required is execution of framed structure work similar to the notified work. It is pointed out that piling work is only a part of the structural work and therefore, the finding of the Works Committee based on Exhibit P6(a) that, the 7th respondent had the requisite experience is wrong. It is contended that the award of contract to the 4th respondent being illegal and petitioner being the sole qualified bidder in the re-tender also, his bid should have been accepted. The learned counsel further submits that, respondents could not have demanded the petitioner to express his willingness to accept the rate quoted by the the 4th respondent, since the 4[th] respondent was a disqualified bidder and not default bidder. Finally it is submitted that by issuing Exhibit P13 notice without obtaining orders from this Court, _**WP(C).No.1989/2020**_ 6 the respondents are attempting to frustrate the reliefs sought in the writ petition. 6. The learned Standing Counsel takes exception to the submission that the University and its officials had attempted to circumvent the interim order of this Court. It is submitted that the subsequent developments were brought to the notice of this Court immediately. It is submitted that the PWD Manual has been adopted by the University and going by Clause 2009.6 of the Manual, if the successful bidder fails to execute the contract agreement within the specified period, the tendering authority can cancel the contract and seek the willingness of the next lowest bidder to execute the work at the accepted rate of the default bidder and if not, re-tender the work. Accordingly, on the 4th respondent withdrawing from the contract, Exhibit R1(e) was issued to the petitioner requesting him to reduce his quoted rate to the lowest rate possible. In Exhibit R1(f) reply the petitioner stated that he was willing to do the work at 1% below estimate rate. That, the 4th respondent having quoted at 10% below estimate rate and the petitioners being willing to reduce the rate by only 1% of estimate rate, the Works Committee of the University decided to re-tender the work as per Exhibit R1(g) decision dated 22.2.2020. According to the learned Counsel, even though the 4th respondent did not produce the experience certificate on the first occasion and was disqualified, in the subsequent tender (Exhibit P3) he _**WP(C).No.1989/2020**_ 7 had produced Exhibit P6(a) experience certificate to prove his experience. It is pointed out that, while the petitioner quoted 0.01% below estimate rate, the 4th respondent had quoted 10% below estimate rate. The monetary difference in the rates being Rs.18,74,463/-, decision was taken to re-tender the work. The learned Standing Counsel relies on the decision of the Honourable Apex Court in _**Municipal Corporation, Ujjain and Another v. BVG India Limited and Others**_ [(2018) 5 SCC 462] to contend that writ courts should not interfere in contractual matters normally and particularly when one of the contracting parties is the Government or its agencies. It is submitted that the power of judicial review should not be invoked to protect private interest by ignoring public interest and the exercise of power of judicial review should be avoided if there is no irrationality or arbitrariness in the award of contract. 7. For resolution of the issue involved, it is necessary to have a glance at the dates and events. The initial notice inviting e-tender is dated 26.10.2019 and the date fixed for opening of the online tender bid was 7.11.2019. In spite of the petitioner being the only qualified bidder, the University chose to re-tender the work. It was thereafter that the 4th respondent obtained EXt. P6(a) certificate dated 25.11.2019. The re-tender notice is dated 3.1.2020 and the date fixed for opening of the online tender bid was 20.1.2020. Accordingly, the bids were opened and the tender of the 4th respondent accepted. In _**WP(C).No.1989/2020**_ 8 the meanwhile, this writ petition was filed and an interim order issued on 14.1.2020, making the further proceedings subject to the result of the writ petition. The 4th respondent was called upon to execute the contract agreement before 5.2.2020 and thereupon the 4[th] respondent issued Exhibit R1(b) letter on 25.1.2020, informing his decision to withdraw from the contract. It is surprising to note that a successful bidder, who had participated in two successive tenders, had withdrawn from the contract within five days of the award, that too, after bidding at 10% below the estimate rate. 8. As far as the challenge against the qualification of the 4th respondent is concerned, it is necessary to have a careful scrutiny of Exhibit P6(a), the only certificate showing the 4th respondent to have carried out work in excess of Rs.75 lakhs. The certification in Exhibit P6(a) is that the 4th respondent has successfully completed the piling work for the construction of four blocks of a residential scheme, totalling an amount of Rs.1,25,00,000/-. The requirement under Exhibit P3 is of an experience certificate of similar framed structure works of not less than Rs.75 lakhs. The piling work of a building, whatever be the magnitude of the work,is not the same as construction of a framed structure, which in the instant case, is the construction of a hostel building. As rightly pointed out by the learned counsel for the petitioner, piling work is only one of the components in the construction of a building. The requirement under Exhibits P1 and P3 _**WP(C).No.1989/2020**_ 9 being the execution of the work of a building in its entirety, acceptance of the 4th respondent's bid and award of contract to him, on the strength of Exhibit P6(a) certificate, was illegal. That being the case, the petitioner's offer could have been considered, he being the only qualified bidder in the re-tender also. 9. The contention of the respondents that they had only acted in terms of the PWD Manual and Exhibit R1(c), cannot also be countenanced. The stipulation in Exhibit R1(c) is that, if the successful bidder fails to execute the agreement within the prescribed time, the tendering authority can cancel the offer of contract and negotiate with the next lowest bidder and award the work to him, if the lowest bidder is willing to execute the work at the accepted rate of the 'default bidder'. The 4th respondent did not have the required experience and could not have been awarded the contract. Only a qualified successful bidder, who fails to execute the agreement, can be termed as 'default bidder'. It is interesting to note that, even though the respondents harp on the stipulation in Exhibit R1(c), providing for re-tender if the lowest bidder is not willing to do the work at the accepted rate of the default bidder, the request in Exhibit R1(e) communication issued to the petitioner was to reduce his quoted rate to the lowest extent possible and not to express his willingness to accept the rate of the default bidder. The petitioner having expressed willingness to reduce the rate to 1% below estimate rate, respondents 1 to 3 ought to have _**WP(C).No.1989/2020**_ 10 considered the offer before deciding to go for another re-tender. No such consideration is discernible from Exhibit P11 minutes of the Works Committee and hence, the decision to re-tender the work without considering the offer of the lowest, and the only qualified, bidder is definitely illegal. 10. The next question is whether this court is precluded from interfering in contractual matters, in spite of noticing a patent illegality. It is true that, from the decision in _**Tata Cellular v. Union of India**_ [(1994) 6 SCC 651] onwards, the Apex Court has cautioned the writ courts from interfering with the exercise of contractual powers by Government bodies. But none of the decisions is to the effect of there being an absolute embargo against such interference. As a matter of fact, in _**Tata Cellular’s case (supra)**_ , after holding the right to refuse the lowest or any other tender to be available with the Government, it was also held that the right to choose cannot be considered to be an arbitrary power and that, if the power to choose is exercised for any collateral purpose, the exercise of that power will be struck down. The learned counsel for the respondents has laid particular emphasis on paragraph 35 in _**Municipal Corporation Ujjain’s case (supra),**_ which is extracted hereunder; _“35. Evaluating tenders and awarding contracts are essentially commercial transactions/contracts. If the decision relating to award of contract is in public interest, the Courts will_ _**WP(C).No.1989/2020**_ 11 _not, in exercise of the power of judicial review, interfere even if a procedural aberration or error in awarding the contract is made out. The power of judicial review will not be permitted to be invoked to protect private interest by ignoring public interest. Attempts by unsuccessful bidders with an artificial grievance and to get the purpose defeated by approaching the Court on some technical and procedural lapses, should be handled by Courts with firmness. The exercise of the power of judicial review should be avoided if there is no irrationality or arbitrariness. In the matter on hand, we do not find any illegality, arbitrariness, irrationality or unreasonableness on the part of the expert body while in action. So also, we do not find any bias or mala fides either on the part of the corporation or on the part of the technical expert while taking the decision. Moreover, the decision is taken keeping in mind the public interest and the work experience of the successful bidder.”_ 11. No doubt, the exercise of power of judicial review should be avoided if there is no irrationality or arbitrariness in the decision of the tendering authority. But, the facts of the instant case disclose a deliberate attempt to prevent award of the contract to the qualified bidder. As a result of such refusal, the right to equality and for equal consideration guaranteed under Article 14 of the Constitution stands infringed. Though the respondents were justified in deciding to retender the work, when the rate quoted by the petitioner, the only qualified bidder, in the first tender was found to unacceptable, as far as the re-tender notified as per Exhibit P3 is concerned, the decision to go for a re-tender again, in spite of the petitioner offering to do the _**WP(C).No.1989/2020**_ 12 work at a lower rate, was, to say the least, irrational and arbitrary. 12. It is a fact that Exhibit P13 is not under challenge. But, having issued an interim order making further proceedings pursuant to Exhibit P3 subject to the result of the writ petition, it is well within the power of this Court to interfere with Exhibit P13 notice issued during the pendency of the writ petition. In the result, Exhibit P13, to the extent of notifying the work covered by Exhibit P3 for re-tender, is quashed. The 1[st] respondent is directed to consider Exhibit P10 offer given by the petitioner and take a reasoned decision thereon, without comparing the offer with the estimate rate quoted by the 4[th] respondent in the tender conducted pursuant to Ext.P3. The decision, as directed, shall be taken within one month from the date of receipt of a copy of this judgment. The writ petition is allowed to the above extent. Sd/- **V.G.ARUN, JUDGE** _vgs_ _**WP(C).No.1989/2020**_ 13 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE NOTICE INVITING E-TENDER NO.A4/2479/19 DATED 26.10.2019 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P2 TRUE COPY OF THE TENDER SUMMARY REPORTS PERTAINING TO THE REJECTION OF 3 BIDS, WHILE ACCEPTING THE BID SUBMITTED BY THE PETITIONER ON 7.11.2019, DOWNLOADED FROM THE WEBSITE OF THE 1ST RESPONDENT, ON 21.1.2020. EXHIBIT P3 TRUE COPY OF THE E-TENDER NO.A4/2479/19 DATED 3.1.2020 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P4 TRUE COPY OF THE EXPERIENCE CERTIFICATE DATED 16.10.2019 ISSUED TO THE PETITIONER BY THE ASSISTANT EXECUTIVE ENGINEER UNDER THE RESPONDENTS 1 TO 3 AT KAU ENGINEERING SUB DIVISION, VELLAYANI. EXHIBIT P5 TRUE COPY OF THE EXPERIENCE CERTIFICATE DATED 6.11.2015 ISSUED BY THE CHIEF ENGINEER, NATIONAL GAMES, KERALA, 2015. EXHIBIT P6 TRUE COPY OF THE CERTIFICATE DATED 3.1.2018, ISSUED BY THE UNIVERSITY ENGINEER OF UNIVERSITY OF KERALA. EXHIBIT P6(A) TRUE COPY OF THE CERTIFICATE DATED 25.11.2019 ISSUED BY THE EXECUTIVE ENGINEER, KERALA STATE HOUSING BOARD, EXHIBIT P6(B) TRUE COPY OF THE CERTIFICATE OF EXPERIENCE DATED 8.8.2019, ISSUED BY THE CHIEF ENGINEER, SPORTS ENGINEERING WING, DIRECTORATE OF SPORTS AND YOUTH AFFAIRS, THIRUVANANTHAPURAM. EXHIBIT P7 TRUE COPY OF THE TENDER SUMMARY REPORTS PERTAINING TO THE ACCEPTANCE OF THE BID SUBMITTED BY THE 4TH RESPONDENT IN PURSUANCE TO EXT.P3 TENDER NOTIFICATION. EXHIBIT P8 TRUE COPY OF THE REPRESENTATION DATED 21.1.2020 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.** _**WP(C).No.1989/2020**_ 14 **EXHIBIT p9** **TRUE COPY OF THE LETTER DATED 14.2.2020 ISSUED BY THE 3RD RESPONDENT.** **EXHIBIT P10** **TRUE COPY OF THE REPRESENTATION DATED 14.2.2020 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.** **EXHIBIT P11 TRUE COPY OF THE MINUTES OF THE MEETING DATED 22.2.2020 HELD UNDER THE 1ST RESPONDENT.** **RESPONDENT'S/S EXHIBITS:** **EXHIBIT R1(A) TRUE COPY OF THE BIDLIST.** **EXHIBIT R1(B) TRUE COPY OF THE LETTER DATED 25.01.2020 OF SRI.BINDUL KRISHNAN C.U.** **EXHIBIT R1(C) TRUE COPY OF THE CONDITIONS OF CONTRACT.** **EXHIBIT R1 D TRUE COPY OF RELEVANT PAGES OF PWD MANUAL SECTION 2009-6 SELECTION NOTICE.** **EXHIBIT R1 E TRUE COPY OF UNIVERSITY LETTER NUMBER A4/2479/2019 DATED 14/02/2020.** **EXHIBIT R1 F TRUE COPY OF LETTER DATED 14/02/2020 OF THE PETITIONER.** **EXHIBIT R1 G TRUE COPY OF THE MINUTES OF WORKS COMMITTEE HELD ON 22/02/2020. EXHIBIT R1 H TRUE COPY OF SHORT E-TENDER NOTICE OF NUMBER 04/19-20 DATED 19/02/2020.**