M/S. CEE JEE LUBRICANTS v. COCHIN SHIPYARD LTD. and M/S. MERIT INDIA LUBRICANTS

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: V. Chitambaresh
Judgment Date: 2012-02-22
Court Decision / Holding: The writ petition is disposed of subject to the above observations. While the court acknowledges the general preference for tender-based disposal of public properties, it notes that the contract with the second respondent has been performed and cannot be interdicted at this stage. The court emphasizes that future disposals should follow proper tendering practices, but declines to grant relief in this case.
Final Disposition: Writ petition disposed of.

Parties to the Case

Appellants / Petitioners

M/S. CEE JEE Lubricants

Respondents

Cochin Shipyard Ltd.
M/S. Merit India Lubricants

Legal Representation & Advocates

Counsels for Petitioners

• Sri V. Krishna Menon

Counsels for Respondents

• Sri K. Anand
• Smt. Latha Krishnan

Case Synopsis & Summary

This writ petition challenges the disposal of waste oil and waste oil sludge by Cochin Shipyard Limited. The petitioner, M/S CEE JEE Lubricants, contends that the shipyard awarded the disposal contract to M/S Merit India Lubricants without inviting tenders, contrary to the practice in previous years. It points to Ext.P3 (2008) and Ext.P4 (2010) tender notices for removal of waste oil and sludge, and relies on Ext.P5 and Ext.P6 sale orders to assert that the petitioner held the right to dispose of waste oil in 2008 and 2009, allegedly after tender publication. The respondent, Cochin Shipyard Limited, counters that the contract was awarded to the second respondent by Ext.P14 dated 25 January 2011, after locating an apt party through telephonic enquiries and discussions, followed by negotiations and mutual terms, with a clause linking quantities of waste oil sludge to used oil. The court acknowledges a general principle that disposal of public properties should usually be by public auction inviting tenders, citing Brihan Mumbai Electric Supply Transport Undertaking v. Laqshya Media Pvt. Ltd (AIR 2010 SC 5). However, since the contract has already been performed, the court declines to interfere and disposes of the petition with observations. The decision highlights that tenders may be required for future disposals, but here the contract stands discharged.

Legal Doctrines & Maxims

Generally disposal of public properties owned by the State or its instrumentalities should be by public auction by inviting tenders.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner argues that the disposal contract was awarded to the second respondent without inviting tenders, contrary to established practice. Ext.P3 and Ext.P4 show tender notices in 2008 and 2010, and Ext.P5 and Ext.P6 indicate prior awards to the petitioner in 2008 and 2009 after tender publication. These facts suggest a competitive procurement process and fairness in awarding the disposal rights. The petitioner seeks scrutiny of the tendering process and appropriate relief to ensure future compliance.

Contentions of Respondents

The respondent asserts that Ext.P14 (25-01-2011) awarded the contract to the second respondent following targeted inquiry and negotiations to locate a suitable contractor. The agreement conditioned the removal of specific quantities of waste oil sludge on corresponding lots of used oil. The contract has been fully performed, and the respondent argues that a fresh tender process is unnecessary and potentially disruptive, especially since the matter concerns performance already completed.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Brihan Mumbai Electric Supply Transport Undertaking v. Laqshya Media Pvt. Ltd	AIR 2010 Supreme Court 5	Positive	Cited to support the proposition that disposal of public properties should ordinarily be through public auction inviting tenders.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE V.CHITAMBARESH** **WEDNESDAY, THE 22ND DAY OF FEBRUARY 2012/3RD PHALGUNA 1933** ## **WP(C).No. 28362 of 2011 (U)** **---------------------------** **PETITIONER:** **-----------------** **M/S.CEE JEE LUBRICANTS, VI/592, INDUSTRIAL DEVELOPMENT AREA, EDAYAR BINANIPURAM P.O., ALUVA-683502 REP. BY ITS PROPRIETOR, C.J.ANTO.** **BY ADV. SRI.V.KRISHNA MENON** **RESPONDENT(S):** **--------------** **1 COCHIN SHIPYARD LTD., ADMINISTRATIVE BUILDING, P.O.NO.1653, KOCHI-682015 REP. BY ITS, MANAGING DIRECTOR.** **2. M/S.MERIT INDIA LUBRICANTS PLOT NO.189,KIADB BOMMASANDRA INDL. AREA, BANGALORE -562105** **R,R1 BY SRI.K.ANAND (A.201) R,R1 BY SMT.LATHA KRISHNAN R BY** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 28362 of 2011 (U)** ## **APPENDIX** ## **PETITIONERS EXHIBITS** - **P1 COPY OF THE RELEVANT PAGE OF THE REGISTRATION CERTIFICATE ISSUED BY THE CENTRAL POLLUTION CONTROL BOARD FOR WASTE OIL** - **P1(a) COPY OF THE RELEVANT PAGE OF THE REGISTRATION CERTIFICATE ISSUED BY THE CENTRAL POLLUTION CONTROL BOARD FOR USED OIL** - **P2 COPY OF THE RELEVANT PAGE OF THE CONSENT ORDER ISSUED BY THE KERALA STATE POLLUTION CONTROL BOARD.** - **P3 COPY OF THE LETTER SEND BY THE RESPONDENT TO THE PETITIONER ASKING IT TO SUBMIT ITS SEALED TENDER FOR REMOVAL OF WASTE OIL.** - **P4 COPY OF THE LETTER SEND BY THE RESPONDENT TO THE PETITIONER ASKING IT TO SUBMIT ITS SEALED TENDER FOR REMOVAL OF WASTE OIL SLUDGE.** - **P5 COPY OF THE SALE ORDER ISSUED TO THE PETITIONER DURING THE YEAR 2008** - **P6 COPY OF THE SALE ORDER ISSUED TO THE PETITIONER DURING THE YEAR 2009** - **P7 COPY OF THE ORDER DATED 2-11-2010 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER** - **P8 COPY OF THE LETTER ISSUED BY THE KERALA STATE POLLUTION CONTROL BOARD TO THE PETITIONER** - **P9 COPY OF THE MINUTES OF THE MEETING HELD ON 20-6-2011** - **P10 COPY OF THE LETTER DATED 5-7-2011 ISSUED BY THE PETITIONER TO THE RESPONDENT** - **P11 COPY OF THE PROJECT REPORT.** - **P12 COPY OF THE LETTER DATED 18-7-2011 SENT TO THE RESPONDENT** - **P13 COPY OF THE REPRESENTATION DATED 5-8-2011 ISSUED BY THE PETITIONER** - **TO THE MANAGING DIRECTOR OF THE RESPONDENT** **WP(C).No. 28362 of 2011 (U) --2-** |**P14**|**COPY OF THE ORDER DATED 25-1-2011 ISSUED BY**|**THE RESPONDENT IN FAVOUR**| |---|---|---| ||**OF M/S.MERIT INDIA LUBRICANTS**|| |**P15**|**COPY OF THE AMENDED ORDER DATED 25-1-2011**|**ISSUED BY THE RESPONDENT**| ||**IN FAVOUR OF M/S. MERIT INDIA LUBRICANTS.**|| |**P16**|**COPY OF THE GATE OUT PASS ISSUED BY THE RESPONDENT IN FAVOUR OF**|| ||**THE PETITIONER**|| |**P17**|**COPY OF THE TEST REPORT DATED 30-7-2011 SUBMITTED BY THE**|| ||**LABORATORY**|| |**RESPONDENTS EXHIBITS**<br>**NIL**||| |||**TRUE COPY**| |||**P.A. TO JUDGE**| **SMM** ## **V.CHITAMBARESH,J.** = = = = = = = = = = **W.P.(C) No.28362 of 2011** = = = = = = = == = = = = = Dated this the 22nd day of February, 2012 **==> picture [167 x 17] intentionally omitted <==** The controversy centers around the disposal of used oil and used sludge/slack by the Cochin Shipyard Limited. The petitioner contends that the Cochin Shipyard Limited has awarded the contract to the second respondent even without inviting tenders contrary to the practice adopted in previous years. The petitioner invites my attention to Ext.P3 tender notice in the year 2008 and Ext.P4 tender notice in the year 2010 for removal and disposal of waste oil sludge by the Cochin Shipyard Limited. The petitioner relies on Exts.P5 and P6 sale orders to contend that it was awarded the right for disposal of waste oil in the year 2008 and 2009. This according to the petitioner was only after inviting tenders from eligible persons by publication in newspapers and in the notice board of the company. 2. The Cochin Shipyard Limited contends that the contract was awarded to the second respondent by Ext.P14 **W.P.(C) No.28362 of 2011** 2 order dated 25-1-2011. The Cochin Shipyard Limited has also filed a counter affidavit wherein it is inter alia averred as follows “Therefore it became necessary for the respondent to locate an apt party by way of telephonic enquiries/discussions for executing the removal of the waste oil sludge as also the used oil/waste oil. As a result one party from Bangalore M/s.Merit India Lubricants, who has valid certificate from Central PCB as well as Karnataka Pollution Control Board, expressed their willingness to remove the waste oil sludge and also the used oil/waste oil. After negotiations and based on mutually agreed terms and conditions, a sale order was issued to the said party on 25-1-2011 with due approval of competent authority of respondent. It was also stipulated in the contract that only if a specific quantity of waste oil sludge is removed, the contractor will be eligible to remove a specific quantity of used oil.” 3. The counsel for the Cochin Shipyard Limited submits that the contract awarded to the second respondent by Ext.P14 order is fully discharged by performance. This is recorded. Therefore any further removal of used oil or sludge/slack can only be done by inviting tenders except for meeting emergent contingencies. I am fortified in this view by the judgment in **Brihan Mumbai Electric Supply Transport Undertaking vs. Laqshya Media Pvt. Ltd** **W.P.(C) No.28362 of 2011** 3 **(AIR 2010 Supreme Court 5 )** wherein it is held as follows. “Generally disposal of public properties owned by the State or its instrumentalities should be by public auction by inviting tenders.” The contention of the Cochin shipyard Limited that an apt party was located by way of telephonic enquiries/ discussions without inviting tenders is difficult to digest. I am however not deliberating on this issue further for arriving at a conclusion since the the contract is already performed by the second respondent. The award of the contract to the second respondent by the Cochin Shipyard Limited cannot be interdicted by this court at this distant time. 4. The writ petition is disposed of subject to the above observations. V.CHITAMBARESH. JUDGE smm # **W.P.(C) No.28362 of 2011** 4 # **W.P.(C) No.28362 of 2011** 5