Labour Bank Welfare Co-Operative Society @ Labour Society Ltd. v. Kannur International Airport Limited and Kannur International Airport Area Labour Contracts Co-Operative Society Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **WEDNESDAY,THE 06TH DAY OF FEBRUARY 2019 / 17TH MAGHA, 1940** **WP(C).No. 31279 of 2018** ## **PETITIONER:** **LABOUR BANK WELFARE CO-OPERATIVE SOCIETY @ LABOUR SOCIETY LTD., NO.C 1632, RAJEEV GANDHI ROAD, KANNUR - 1, P.O. KANNUR REPRESENTED BY ITS PRESIDENT (SRI. K. SURENDRAN, S/O. KANNAN, AGED 64 YEARS, RESIDING AT SOORYA, CHALAD P.O, KANNUR - 14)** **BY ADVS. SRI.K.V.PAVITHRAN M.P.JAYANANDAN SRI.P.SAJU SRI.N.DHARMADAN (SR.)** ## **RESPONDENTS:** - **1 KANNUR INTERNATIONAL AIRPORT LIMITED (KIAL) REPRESENTED BY ITS MANAGING DIRECTOR, KANNUR INTERNATIONAL AIRPORT LTD., KANNUR, P.O. MATTANNUR.** - **2 KANNUR INTERNATIONAL AIRPORT AREA LABOUR CONTRACTS CO-OPERATIVE SOCIETY LIMITED NO.C 2054 H. K.CITY CENTRE, THALASSERY ROAD, MATTANNUR REPRESENTED BY ITS SECRETARY.** **BY ADVS. SMT.C.LEENA SRI.JOSON MANAVALAN SRI.K.JOHN MATHAI SRI.KURYAN THOMAS SRI.M.GOPIKRISHNAN NAMBIAR SRI.PAULOSE C. ABRAHAM SRI.P.GOPINATH (SR.)** ## **OTHER PRESENT:** **SR.ADV.DHARMADHAN FOR PETITIONER SR.ADV.P.GOPIKRISHNAN NAMBIAR FOR R1** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C).No.31279/18 2 ## **JUDGMENT** - 1.This writ petition is filed seeking the following reliefs:- I.Issue a writ of mandamus directing the 1[st] respondent to invite public tenders or quotations for granting the licence to run the Kannur Airport Canteen. - 2.Quash the licence if any granted by the 1[st] respondent to the 2[nd] respondent or any other person for running Airport Canteen without inviting public tenders and/quotations ensuring transparency. 3. Declare that the 1[st] respondent has no right to entrust contract works or to issue licence to run canteen or such other public utility services in the Kannur International Airport sacrificing transparency. - “(3A) To issue a writ of certiorari quashing Ext.P7 decision of the 1[st] respondent to give right to the 2[nd] respondent to run canteen in the Kannur International Airport premises without inviting public tenders.” - 2.Heard Sri.N.Dharmadhan, the learned Senior Counsel appearing for the petitioner and Sri.P.Gopinatha Menon, the learned Senior Counsel appearing for the 1[st] respondent as well as Smt.Leena C, the learned counsel appearing for the 2[nd] respondent. - 3.It is contended by the learned counsel for the petitioner that the petitioner is a Labour Contract Society, which is W.P.(C).No.31279/18 3 undertaking contract works and other activities permitted by the bye-laws. It is stated that the 1[st] respondent is a public/ private partnership company with the Government holding a substantial share therein. It is stated that the 1[st] respondent had been entrusting various works in connection with the airport by e-tender process. However, with regard to the licence for running the airport canteen, the 1[st] respondent had taken steps to award the contract to the 2[nd] respondent without inviting any tender. Though an application was made under the Right to Information Act, on behalf of the petitioner seeking details, no reply had been received. - 4.It is stated that petitioner had submitted Exhibit P6 letter dated 13.8.2018 expressing its willingness to take up contract works in the airport. The petitioner challenges Exhibit P7 decision taken by the 1[st] respondent to award the work of running the canteen to the 2[nd] respondent. The petitioner has produced Exhibits P8 to P26 documents to show that the Kannur International Airport Limited is a Government company, which is completely under the control W.P.(C).No.31279/18 4 of the Government of Kerala. It is contended that the 1[st] respondent cannot engage in contracts with entities like the 2[nd] respondent at its whims and fancies and without calling for any competitive tender. Relying on the decisions of the Apex Court in **Union of India v. Dinesh Engineering Corporation and another** [2001 SCC 3887], **Saroj Screens Pvt.Ltd. v. Ghanshyam and others** [AIR 2012 SC 1649], **Board of Control for Cricket in India v. Cricket Association of Bihar and others** [AIR 2015 SC 3194] and **Air India Ltd. v. Cochin International Airport Ltd. and others** [AIR 2000 SC 801], the learned Senior Counsel appearing for the petitioner would contend that entities which answer to the definition of State under Article 12 of the Constitution of India cannot engage in contracts without calling for any tenders whatsover and entrust works to persons of their choice. 5. A detailed counter affidavit has been placed on record by the 1[st] respondent. The first contention taken is that the 1[st] respondent W.P.(C).No.31279/18 5 is not a 'State' under Article 12 of the Constitution and its operations in the commercial realm are, therefore, not amenable to challenge under Article 226 of the Constitution of India. Without prejudice to the said contention, it is stated that the issue is only with regard to the allotment of a staff canteen in the premises to the 2[nd] respondent. It is contented that conduct of the staff canteen also formed part of the tender invited by the 1[st] respondent as per Exhibit P3. However, the awardee of the contract for conduct of Food and Beverages outlets in the airport was not interested in the running of the staff canteen. It is stated that the petitioner had, at no point of time, expressed any interest in the running of the canteen or Food and Beverages outlet which was tendered by Exhibit P3. It is stated that Exhibit P6 itself would show that the petitioner society had expressed interest in the formation of gardens, maintenance and upkeep of existing gardens, turfing and allied works. The petitioner society had also not participated in the tender for Food and Beverages outlet in the airport. 6.It is further contended that the 2[nd] respondent is a society of persons whose land had been acquired for construction of the W.P.(C).No.31279/18 6 Kannur International Airport. It is stated that one of the conditions in the Government Order dated 1.2.2008 for acquisition of land was that the evictees from the acquired land should be given preference in the matter of employment or allied services/ agencies. It is stated that when the tenderer for Food and Beverages outlets expressed unwillingness to conduct the staff canteen, the Board of the 1[st] respondent had decided to allot the running of the staff canteen with the 2[nd] respondent at mutually agreed rates for three years. It is stated that there is absolutely no illegality or hidden political agenda involved in the award of the work. The 2[nd] respondent is a cooperative society comprising of evictees from the land where the airport was constructed. The learned Senior Counsel appearing for the 1[st] respondent would rely on the decisions of the Apex Court in **Score Information** ## **Technologies Ltd.v. Sriyash Technologies Ltd and others** [2016 KHC 6208] to contend that even where no tender had been invited, unless there is any _mala fides_ vitiating the decision, there would be no illegality in award of contract without inviting the tender. W.P.(C).No.31279/18 7 7.A detailed counter affidavit has been placed on record by the 2[nd] respondent as well. It is contended that the 2[nd] respondent has been entrusted with the conduct of the staff canteen in the airport premises alone. It is stated that the petitioner has no _locus standi,_ whatsoever, to challenge the award of the work to the 2[nd] respondent. It is stated that a tender had been invited for conducting Food and Beverages outlets in the airport and the concessionaire has refused to run the staff canteen. It is stated that thereafter, the Board had taken a decision to entrust the conduct of the staff canteen to the 2[nd] respondent, which is a co-operative society, most of the members of which are persons whose lands were acquired for the airport. It is stated that the petitioner, who had never bid in the tender for conduct of Food and Beverages outlets and who had never expressed any interest or proved its qualification for the conduct of the staff canteen in the premises, has approached this Court only on an experimental basis and that the writ petition which is totally devoid of merits, is liable to be dismissed. W.P.(C).No.31279/18 8 8. I have considered the contentions advanced. The petitioner contends that it is a Labour Contract Society. The petitioner does not have a case that it had participated in the auction conducted pursuant to Exhibit P3 for conduct of Food and Beverages outlets in the airport. No material is on record to show what the permitted activities of the petitioner society are. Exhibit P4 request of the petitioner would also show that it had expressed interest for carrying out gardening and allied works in the airport alone. According to me, the learned Senior Counsel for the petitioner is well justified in contending that the 1[st] respondent, which is a public/private partnership which is formed for the purpose of establishing and running of an airport is definitely an entity amounts to writ jurisdiction of this Court. The 1[st] respondent would be duty bound to function in accordance with the requirements of fairness and non arbitrariness in all aspects of its functioning. The question to be considered, therefore, is whether the award of work of running the staff canteen for a period of three years to the 2[nd] respondent without inviting a tender would amount to arbitrary exercise of power by the 1[st] respondent. W.P.(C).No.31279/18 9 9.The 2[nd] respondent by its uncontroverted pleadings, is a Cooperative Society consisting of evictees from the acquired land as majority of its members. It is contended that the awardee of the contract for conduct of Food and Beverages outlet in the airport had refused to carry out the conduct of the staff canteen apparently for the reason that the staff canteen would have to be operated at concessional rates. It appears that an informed decision was taken by the 1[st] respondent to award the work to the 2[nd] respondent. It is the specific case of the 1[st] respondent that the Government Order for acquisition of land had specifically provided that evictees from the land would be given preference in the matter of employment in the airport as also in the conduct of allied services in connection with the same. Exhibit P7 decision taken by the Board of the 1[st] respondent to allot the running of the staff canteen to the 2[nd] respondent cannot be said to be an exercise vitiated by arbitrariness in any manner. The contention with regard to the political reasons behind the said allotment are not borne out by any proper pleadings, much less, any material to substantiate the said contention. W.P.(C).No.31279/18 10 10.In the above view of the matter, I am of the opinion that the entrustment of the conduct of staff canteen to the 2[nd] respondent at mutually agreed rates is not open to challenge at the instance of the petitioner, who has never expressed any interest or capability in carrying out the said work. Considering the facts and circumstances of the instant case, I am of the opinion that the award of work to the 2[nd] respondent, taking note of the fact that majority of its members are evictees from the land acquired for the airport cannot be said to be arbitrary or vitiated by lack of transparency. The prayers sought for in this writ petition cannot be granted. The writ petition fails and the same is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj W.P.(C).No.31279/18 11 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE AMENDED BYE-LAW OF THE PETITIONER SOCIETY.** - **EXHIBIT P2 TRUE COPY OF THE NOTICE PUBLISHED BY 2ND RESPONDENT IN CONNECTION WITH ITS OFFICE INAUGURATION.** - **EXHIBIT P3 TRUE COPY OF THE LIST SHOWING E- TENDERING OF 48 ITEM OF WORKS BY THE 1ST RESPONDENT DOWNLOADED FROM THE WEBSITE OF KERALA GOVT.WWW.KERALAGOVT.IN** - **EXHIBIT P4 TRUE COPY OF THE AWARD DT.29.08.2018 ISSUED BY THE 1ST RESPONDENT TO GATEWAY SECURITY.** - **EXHIBIT P5 TRUE COPY THE APPLICATION SUBMITTED TO THE 1ST RESPONDENT UNDER RIGHT TO INFORMATION ACT THROUGH ITS LAWYER ON 10.08.2018 WITH POSTAL RECEIPT AND ACKNOWLEDGMENT.** - **EXHIBIT P6 TRUE COPY OF THE LETTER DT.13.08.2018 ISSUED BY THE PETITIONER TO 1ST RESPONDENT.** - **EXHIBIT P7 TRUE COPY OF THE DECISION OF THE 1ST RESPONDENTS 45TH BOARD MEETING HELD ON 28/6/2018** - **EXHIBIT P8 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.2/98/TRAN. DATED 17/1/1998.** - **EXHIBIT P9 TRUE COPY OF THE ORDER NO. G.O(MS) 497/07/TRAN. DATED 22/10/2007.** **EXHIBIT P10 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.31/2007TRAN. DATED 13/8/2007** W.P.(C).No.31279/18 12 - **EXHIBIT P11** - **TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.30/2009/TRAN. DATED 26/3/2009** - **EXHIBIT P12 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.24/2008/TRAN. DATED 4/6/2008** - **EXHIBIT P13 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.29/2008/TRAN. DATED 5/7/2008 APPOINTING SRI.V.THULASIDAS AS A FULL TIME SPECIAL OFFICER KANNUR.** - **EXHIBIT P14 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.23/2009/TRAN. DATED 10/2/2009 APPOINTING KINFRA AS THE NODAL AGENCY FOR THE KANNUR AIRPORT PROJECT.** - **EXHIBIT P15 TRUE COPY OF THE ORDER G.O.(RT) 80/2009/TRAN. DATED 19/2/2009.** - **EXHIBIT P16 TRUE COPY OF THE GOVERNMENT ORDER G.O. (RT) NO.307/2009/TRAN. DATED 26/8/2009** - **EXHIBIT P17 TRUE COPY OF THE GOVERNMENT ORDER G.O. (RT) NO.233/2009/TRAN. DATED 3/7/2009** - **EXHIBIT P18 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.44/2009/TRAN. DATED 18/7/2009** - **EXHIBIT P19 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.60/2009/TRAN. DATED 29/10/2009** - **EXHIBIT P20 TRUE COPY OF THE MEMORANDUM OF ASSOCIATION OF KANNUR INTERNATIONAL AIRPORT LIMITED DATED 20/11/2009 OF THE 1ST RESPONDENT COMPANY.** - **EXHIBIT P21 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.13/2010/TRAN. DATED 27/2/2010** - **EXHIBIT P22 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.38/2010/TRAN. DATED 31/3/2010** - **EXHIBIT P23 TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.40/2010/TRAN. DATED 12/4/2010** 13 W.P.(C).No.31279/18 **EXHIBIT P24** - **TRUE COPY OF THE GOVERNMENT ORDER G.O. (RT) NO.250/2010/TRAN. DATED 24/6/2010** **EXHIBIT P25** - **TRUE COPY OF THE GOVERNMENT ORDER G.O. (MS) NO.71/2010/TRAN. DATED 19/10/2010** **EXHIBIT P26** - **TRUE COPY OF THE GOVERNMENT ORDER G.O. (RT) NO.587/2010/TRAN. DATED 28/12/2010** **EXHIBIT P27** **TRUE COPY OF THE BYE LAW OF THE 2ND RESPONDENT.** **RESPONDENT'S EXHIBITS:** **EXHIBIT R1 A** TRUE COPY OF THE EXTRACT FROM THE MINUTES OF THE 45TH BOARD MEETING DATED 28/6/2018. **EXHIBIT R2 A** TRUE COPY OF COMMUNICATION DATED 14.1.2019 ISSUED BY PETITIONER. True copy PS to Judge