Laxmi Civil Engineering Services Pvt Ltd vs Kerala Water Authority and others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **THURSDAY, THE 21ST DAY OF NOVEMBER 2019 / 30TH KARTHIKA, 1941** **WA.No.2357 OF 2019** **AGAINST THE JUDGMENT DATED 15.11.2019 IN WP(C) 24627/2019(C) OF HIGH COURT OF KERALA** ## **APPELLANT/WRIT PETITIONER:** **LAXMI CIVIL ENGINEERING SERVICES PVT LTD., CORPORATION OFFICE, C.S.NO.1031/K2, E WARD, 3RD FLOOR, STERLING TOWER, GAVAL MANDAL,SHAHUPURI, KOLHAPUR, MAHARASHTRA-416001, REPRESENTED BY ITS AUTHORIZED SIGNATORY, BHAGATH KRISHNAN B.** **BY ADVS. S.SREEKUMAR (SR.) SRI.P.MARTIN JOSE SRI.R.GITHESH SRI.P.PRIJITH SRI.THOMAS P.KURUVILLA SRI.MANJUNATH MENON SHRI.HARIKRISHNAN S. SRI.AJAY BEN JOSE** ## **RESPONDENTS/RESPONDENTS:** - **1 KERALA WATER AUTHORITY, JALABHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM-695033, REPRESENTED BY ITS MANAGING DIRECTOR,** - **2 THE MANAGING DIRECTOR, KERALA WATER AUTHORITY, JALABHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM-695033,** - **3 THE SUPERINTENDING ENGINEER, PUBLIC HEALTH CIRCLE, KERALA WATER AUTHORITY, OBSERVATORY HILLS, THIRUVANANTHAPURAM-695033.** **4 M/S. CHICAGO CONTSTRUCTIONS INTERNATIONAL(P) LTD, TC.22/2703, CHITHIRA LANE, KOCHAR ROAD, SASTHAMANGALAM, THIRUVANANTHAPURAM-695010, REPRESENTED BY ITS MANAGING DIRECTOR,** 2 W.A.NO.2357/2019 **5 M/S. FLOWMORE LIMITED, 303,3RD FLOOR, PLOT NO.2068/69, KAROL BAGH, 38 NAI WALAN, NEW DELHI-110005, REPRESENTED BY ITS MANAGING DIRECTOR,** **R5 BY ADV. SMT.JEENA JOSEPH R5 BY ADV. SRI.G.D.PANICKER** **SRI.S.RAMESH BABU(SR) FOR R4, SRI.SAJI VARGHESE KAKKATTUMATTATHIL, SRI. BENJAMIN PAUL, SC FOR R1 TO R3, SMT. JEENA JOSEPH, SC FOR R5** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 21.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** 3 W.A.NO.2357/2019 ## **JUDGMENT** ## **Dated this the 21st day of November 2019** ## **Shaffique,J.,** This writ appeal is filed challenging the judgment dated 15.11.2019 in W.P.(C).No.24627/2019. The writ petition has been filed by the appellant seeking for a declaration that the bid submitted by Joint Venture of respondents 4 and 5 in pursuance to Ext.P1 notification is non responsive and it cannot be finalized. 2. The short facts of the case are as under: The Kerala Water Authority, 1[st] respondent herein had invited quotations for the purpose of work relating to 120 MLD Water Treatment Plant with plate settler technology (lamella), design, construction, commissioning and maintenance of floating intake structures, supplying and laying 1422 mm MS Raw Water Pumping Main, supplying, erection, testing and commissioning of submerged centrifugal pump set, supplying and erection of transformers, construction of substation building, installation of SCADA system for functioning of entire WTP components and allied works with full automation as per Tender No.41/2018-10/KWA.PHC/D2/TVM. 3. Pursuant to the aforesaid notification, tenders were submitted by the appellant and also by a joint venture of respondents 4 W.A.NO.2357/2019 4 and 5. Both the parties were qualified in respect of the technical bid and when price bid was opened, the joint venture of respondents 4 and 5 was found to be the lowest, and the appellant was the 2[nd] lowest. The appellant contended that the tender submitted by respondents 4 and 5 did not comply with the procedural formalities as mentioned in Ext.P1 and therefore the petitioner had approached this Court inter alia contending that, in so far as the tender submitted by respondents 4 and 5 was defective, the tender could not be accepted. 4. In the writ petition, it is inter alia contended that certain procedural requirement which ought to be complied with for the purpose of pre-qualification of tender had not been properly submitted. Reference is made by the petitioner to the power of attorney as well as the joint venture agreement to indicate that there are deficiencies in the said documents and that no proper joint venture agreement had been executed between the parties. 5. Kerala Water Authority in their objection had stated that the work had been awarded to the joint venture of respondents 4 and 5 taking into account the fact that they were the lowest tenderer. The difference in the quoted amount between the petitioner and the joint venture of respondents 4 and 5 is Rs.7,06,91,937/-. According to them, there were certain mistakes in both the tenders submitted by the joint venture as well as the appellant and they had permitted both the parties to correct the said mistakes. But the joint venture of respondents 4 and 5 alone came and corrected the mistakes. This 5 W.A.NO.2357/2019 approach of the Tendering Authority had been taken into account by the appellant as one of the deficiency in order to contend that the procedure had not been properly followed. 6. But it is relevant to note that opportunity had been given to both the parties to correct the technical errors and other mistakes and it is thereafter that the price bid was opened. In so far as both the parties were technically qualified, the only other aspect to be taken into consideration is the price bid. The petitioner does not have a case that the price bid corrected at any point of time. 7. Learned Single Judge after considering the entire issues found that there is no reason to interfere with the award of the work in favour of the joint venture. It is observed that the joint venture of respondents 4 and 5 had all the qualification to participate in the tender and which aspect had been approved by the Tendering Authority. It is also noticed that a Special Committee constituted for the purpose of the work took a decision to pre-qualify both the tenderers on 21.06.2019. Notices were issued to the petitioner/appellant pointing out six defects in the bid documents submitted by them and seeking clarifications with regard to the same on 4.7.2019. But no reply was submitted by the petitioner. Similar notices had been issued to respondents 4 and 5 as well on 2.7.2019. They clarified all the aspects and produced revised documents. It is in the said background, it is opined that there were no major defects in the documents submitted by the joint venture and accordingly, the 6 W.A.NO.2357/2019 writ petition was dismissed. It is also noticed that there is no allegation of malafides or extraneous consideration to enter into an enquiry at the stage, when the work had been awarded in favour of the joint venture. 8. The learned Senior Counsel for the appellant however placing reliance on the judgment of the Apex Court in **West Bengal State Electricity Board v Patel Engineering Co. Ltd** [(2001) 2 SCC 451] would contend that the procedure prescribed by the Tendering Authority has not been properly and scrupulously followed by the joint venture. The learned counsel points out that there are defects in the joint venture agreement, as well as the power of attorney and that the Tendering Authority had not considered the tender documents in accordance with the procedure laid down under the notice inviting tenders. 9. We also heard the learned counsel appearing for the Kerala Water Authority, respondents 1 to 3 and learned counsel appearing for the joint venture, respondents 4 and 5 herein. 10. The law in this regard is well settled by the Apex Court judgment in _**Tata Cellular v. Union of India**_ [(1994) 6 SCC 651]. Paragraph 77 is relevant, which reads as under:- - _**“77.** The duty of the court is to confine itself to the question of legality. Its concern should be:_ _1. Whether a decision-making authority exceeded its powers?_ _2. Committed an error of law,_ _3. committed a breach of the rules of natural justice,_ 7 W.A.NO.2357/2019 _4. reached a decision which no reasonable tribunal would have reached or,_ ## _5. abused its powers._ _Therefore, it is not for the court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case to case. Shortly put, the grounds upon which an administrative action is subject to control by judicial review can be classified as under:_ - _(i) Illegality : This means the decision-maker must understand correctly the law that regulates his decision-making power and must give effect to it._ - _(ii) Irrationality, namely, Wednesbury unreasonableness._ - _(iii) Procedural impropriety._ _The above are only the broad grounds but it does not rule out addition of further grounds in course of time. As a matter of fact, in R. v. Secretary of State for the Home Department, ex Brind, Lord Diplock refers specifically to one development, namely, the possible recognition of the principle of proportionality. In all these cases the test to be adopted is that the court should, “consider whether something has gone wrong of a nature and degree which requires its intervention”._ ## Further at paragraph 94, it is held as under:- - _**“94.** The principles deducible from the above are:_ - _(1) The modern trend points to judicial restraint in administrative action._ - _(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made._ - _(3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible._ - _(4) The terms of the invitation to tender cannot be open to_ 8 W.A.NO.2357/2019 _judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts._ _(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides._ _(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.”_ ## 11. In _**B.S.N.Joshi & Sons Ltd v. Nair Coal Services Ltd & Others**_ [(2006) 11 SCC 548], it was held at paragraph 66 as under:- _**“66.** We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarised as under:_ _(i) if there are essential conditions, the same must be adhered to;_ _(ii) if there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully;_ _(iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing;_ _(iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract,_ 9 W.A.NO.2357/2019 _particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction;_ _(v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;_ _(vi) the contractors cannot form a cartel. If despite the same, their bids are considered and they are given an offer to match with the rates quoted by the lowest tenderer, public interest would be given priority;_ _(vii) where a decision has been taken purely on public interest, the court ordinarily should exercise judicial restraint.”_ 12. It is quite usual that while evaluating tenders, some clarifications or additional documents may be required. When such clarifications are sought from both the parties, it does not affect the tender process at all. In this case, the only deficiency pointed out was certain errors in the documents relating to the joint venture and power of attorney, and also to the fact that certain errors were permitted to be corrected after the submission of the bid. 13. Apparently, as rightly observed by the learned Single Judge, when opportunity had been given to either parties to correct certain mistakes in the tender documents and provide clarification, we don't find any illegality in doing so. In any tender, there might be some clarifications to be sought for. At any case, when both the parties are found to be technically qualified, the only other aspect to be looked 10 W.A.NO.2357/2019 into is the price bid. There is no case that the price bid had been corrected in any form. That apart, it is pointed out that, after awarding of the work, 20% of the work of procurement of materials is already over, as work orders for procurement had been issued and the supply of materials will commence soon. 14. Under such circumstances, we don't think that the learned Single Judge had committed any error in dismissing the writ petition. We do not find any reason to interfere with the judgment or the tendering process initiated by the Kerala Water Authority, awarding tender in favour of the joint venture of respondents 4 and 5. The writ appeal is dismissed. ## **Sd/-** **S.MANIKUMAR** **CHIEF JUSTICE** **Sd/-** ## **A.M.SHAFFIQUE** kp True copy P.A. To Judge. **JUDGE**