M/S. EDHENS CONSTRUCTIONS PVT. LTD v. KANTHALLOOR GRAMA PANCHAYATH and Others

W.P.(C)No.28941 of 2019(P) ::1:: ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **WEDNESDAY, THE 22ND DAY OF JULY 2020 / 31ST ASHADHA, 1942** ## **WP(C).No.28941 OF 2019(P)** ## **PETITIONER/S:** **M/S. EDHENS CONSTRUCTIONS PVT. LTD DOOR NO.5/69-1, ETTIL, PATHADIPPALAM, MARAYOOR, IDUKKI-685620, REPRESENTED BY ITS MANAGING DIRECTOR.** **BY ADV. SRI.LATHEESH SEBASTIAN** ## **RESPONDENT/S:** |**1**|**KANTHALLOOR GRAMA PANCHAYATH**| |---|---| ||**KANTHALLOOR P O, IDUKKI DISTRICT-685620,**| ||**REPRESENTED BY ITS SECRETARY.**| |**2**|**SECRETARY, KANTHALLOOR GRAMA PANCHAYATH,**| ||**KANTHALLOOR P O, IDUKKI DISTRICT-685620,**| |**3**|**JOSEPH PAUL,MANNIKUTTIYIL, SAHAYAGIRI P.O,**| ||**MARAYOOR, IDUKKI DISTRICT-685620,**| |**4**|**OLIVIA HOME WORLD, IRUMUPALAM P O, ADIMALY, IDUKKI**| ||**DISTRICT-685561.**| ||**R1-2 BY ADV. SRI.P.MARTIN JOSE**| ||**R1-2 BY ADV. SRI.P.PRIJITH**| ||**R1-2 BY ADV. SRI.THOMAS P.KURUVILLA**| ||**R1-2 BY ADV. SRI.AJAY BEN JOSE**| ||**R1-2 BY ADV. SMT.HANI P.NAIR**| ||**R1-2 BY ADV. SRI.MANJUNATH MENON**| ||**R1-2 BY ADV. SHRI.HARIKRISHNAN S.**| ||**R4 BY ADV. SRI.K.R.ARUN KRISHNAN**| ||**R4 BY ADV. SRI.SUDEEP ARAVIND PANICKER**| ||**R4 BY ADV. SRI.MATHEW A KUZHALANADAN**| **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C)No.28941 of 2019(P) ::2:: ## **JUDGMENT** The petitioner, a company registered under the Companies Act, 2013, has filed this writ petition under Article 226 of the Constitution of India seeking a writ of certiorari to quash Ext.P8 tender notice No.A5/2568/18 dated 03.10.2019 and Ext.P9 tender notice No.A6/1069/2019 dated 03.10.2019 issued by the 2[nd] respondent, who is the Secretary of the 1[st] respondent Grama Panchayat, on the ground that it is vague for want of specifications and the details of tenders. The petitioner has also sought for an alternate relief, i.e., a writ of mandamus commanding respondents 1 and 2 to accept its tenders on the basis of Ext.P8 and consider those tenders along with that of other bidders. 2. On 29.10.2019, when this writ petition came up for admission, this Court issued notice by special messenger to respondents 1 to 4. While listing the writ petition to 01.11.2019 for further consideration, this Court has ordered that, if the tenders of others have been considered, then the petitioner's offer shall also be considered, subject to further orders from this Court. On 05.11.2019, it was ordered that the grant of contract, if any, by the Panchayat will be subject to further orders from this Court. 3. Respondents 1 and 2 have filed a detailed counter W.P.(C)No.28941 of 2019(P) ::3:: affidavit opposing the reliefs sought for in this writ petition. 4. The petitioner filed I.A. No.1 of 2020, seeking an order to amend the writ petition by incorporating additional statement of facts, grounds and reliefs. That application was allowed by the order dated 17.01.2020 and the petitioner has also filed an amended writ petition. 5. Heard the learned counsel for the petitioner, the learned counsel for respondents 1 and 2 and also the learned counsel for the 4[th] respondent. Despite service of notice, none appears for the 3[rd] respondent. 6. The petitioner is a company registered under the Companies Act, 2013 as evidenced by Ext.P1 certificate of registration and Ext.P2 certificate of incorporation. The petitioner company is having registration as Micro and Small Enterprise under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006. The document marked as Ext.P3 is Udyog Aadhaar Memorandum of the petitioner company, specifying its major activities as follows; |**Sl.**<br>**No**<br>**.**|**NIC 2 Digit**|**NIC 4 Digit**|**NIC 5 Digit Code**|**Activity Type**| |---|---|---|---|---| |1|71-Architecture<br>and engineering<br>activities;<br>technical testing<br>and<br>analysis|7110-<br>Architectural<br>and<br>engineering<br>activities and<br>related|71100 -<br>Architectural and<br>engineering<br>activities and<br>related technical<br>consultancy|Services| W.P.(C)No.28941 of 2019(P) ::4:: |||technical<br>consultancy||| |---|---|---|---|---| |2|81- Services to<br>buildings and<br>landscape<br>activities|8130 -<br>Landscape<br>care and<br>maintenance<br>service<br>activities|81300-Landscape<br>care and<br>maintenance<br>service activities|Services| |3|42 - Civil<br>Engineering|4220 -<br>Construction<br>of utility<br>projects|42204 -<br>Construction and<br>maintenance of<br>water main and<br>line<br>connection, water<br>reservoirs including<br>irrigation system<br>(canal)|Manufacturing| |4|42- Civil<br>Engineering|4290<br>Construction<br>of other civil<br>engineering<br>projects|42903 Construction<br>of dams etc.|Manufacturing| |5|42- Civil<br>Engineering|4290<br>Construction<br>of other civil<br>engineering<br>projects|42909 Other civil<br>engineering<br>projects n.e.c.|Manufacturing| |6|43-Specialized<br>construction<br>activities|4321 -<br>Electrical<br>installation|43219 Other<br>electrical electrical<br>installation n.e.c.|Manufacturing| |7|43-Specialized<br>construction<br>activities|4330 –<br>Building<br>completion<br>and finishing|43309 Other<br>building completion<br>and finishing|Manufacturing| |8|42- Civil<br>Engineering|4210 -<br>Construction<br>roads and<br>railways|42101-<br>Construction and<br>maintenance of<br>motorways,<br>streets, roads,<br>other vehicular and<br>pedestrian ways,<br>highways, bridges,<br>tunnels and<br>Manufacturing<br>subways|Manufacturing| |9|41-Construction<br>of building|4100 -<br>Construction<br>of buildings|41001-<br>Construction of<br>buildings carried<br>out on own-<br>account basis or<br>an a fee or<br>contract basis|Manufacturing| |10|41-Construction<br>of building|4100 -<br>Construction<br>of buildings|41002 - Activities<br>relating to<br>alteration,<br>addition, repair,|Manufacturing| W.P.(C)No.28941 of 2019(P) ::5:: **==> picture [201 x 74] intentionally omitted <==** maintenance Manufacturing carried out on own-account basis or on a fee or contract basis **==> picture [79 x 74] intentionally omitted <==** 7. The document marked as Ext.P4 is a communication dated 16.11.2017 of the Joint Secretary and Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises, Government of India, enclosing therewith an illustrated list of activities classified as service activities by World Trade Organisation (WTO)/General Agreements on Tariffs and Trade (GATT), which can be acknowledged as service enterprises under the Micro, Small and Medium Enterprises Development Act. Clause 3 of Services Sectoral Classification List in Ext.P4, which deals with 'Construction and Related Engineering Services' and Clause 4, which deals with ## 'Distribution Services' read thus; ## “3. CONSTRUCTION AND RELATED ENGINEERING SERVICES |A|General construction work for buildings|512| |---|---|---| |B|General construction work for civil<br>engineering|513| |C|Installation and assembly work|514+516| |D|Building completion and finishing work|517| |E|Other|511+515+518| ## 4. DISTRIBUTION SERVICES |A|Commission agents'services|621| |---|---|---| |B|Wholesale trade services|622| |C|Retailing services|631+632<br>6111+6113+6121| |D|Franchising|8929| |E|Other|511+515+518| 8. The document marked as Ext.P5 is the first page of communication F.No.25(2)/2011-MA dated 14.10.2011 issued by the W.P.(C)No.28941 of 2019(P) ::6:: Joint Secretary and Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises, Government of India, addressed to the Secretary of all Ministries/Departments of Government of India on implementation of the Government Purchase and Price Preference Policy for Micro and Small Enterprises. The petitioner relies on Ext.P5, in order to contend that a Micro and Small Enterprise is entitled for issue of tender sets free of cost; exemption from payment of Earnest Money; waiver of Security Deposit upto the monetary limit for which the unit is registered; Price Preference upto 15% over the quotation of large scale units; etc. 9. As per Ext.P6 Government order, i.e., G.O.(P)No.546/ 2013/Fin. dated 07.11.2013, the Government of Kerala adopted the Public Procurement Policy of Government of India to Micro and Small Enterprises in Kerala, registered under the National Small Industries Corporation, etc. In Ext.P6, in modification of G.O(P)No.489/13/Fin. dated 26.09.2013, it was decided to extend various benefits of Public Procurement Policy to the Micro and Small Enterprises in Kerala, as per which, in tender, participating Micro and Small Enterprises quoting price within price band of L1 + 15% shall also be allowed to supply 20% of the total tendered value. 10. The document marked as Ext.P7 is a renewal certificate W.P.(C)No.28941 of 2019(P) ::7:: dated 29.08.2019 issued by the National Small Industries Corporation Ltd., valid for the period from 17.07.2019 to 16.07.2021, as per which the petitioner company is registered as a Micro and Small Enterprise eligible for participation in the Central Government Stock Purchase Programme, as per the Single Point Registration Scheme for the item/store/service specified in the list attached to that renewal certificate. Relying on Ext.P7, the petitioner contended before this Court that it is entitled for the benefits under Exts.P5 and P6. However, the list attached to the renewal certificate does not form part of Ext.P7 (page No.25 of the writ petition). 11. The document marked as Ext.R2(g) along with the counter affidavit filed by respondents 1 and 2 is the full set of the renewal certificate dated 29.08.2019 of the petitioner company, which is one issued by the National Small Industries Corporation Ltd., valid for the period from 17.07.2019 to 16.07.2021, along with the notes and list attached to that certificate. The list attached to renewal certificate, which is available at page No.24 of the counter affidavit filed by respondents 1 and 2, reads thus; |Sl<br>No.|Name of<br>Service/Activities|Definition of<br>Activity/Service(s)|Quantitative<br>Capacity/Services PM| |---|---|---|---| |1|Construction of<br>buildings, civil<br>engineering works,<br>specialized<br>construction activities<br>and forestry works|As per Kerala PWD<br>and Wildlife<br>Department rules|1600 man hours P.M.P.S<br>on service mix basis| 12. In the writ petition, it is averred that the 2[nd] respondent W.P.(C)No.28941 of 2019(P) ::8:: invited competitive tenders from institutions and contractors on the basis of the relevant Government Orders. The document marked as Ext.P8 is a copy of tender notice bearing No.A3/2568/18 dated 03.10.2019 and that marked as Ext.P9 is a copy of another tender notice bearing No.A6/1069/2019 dated 03.10.2019 issued by the 2[nd] respondent. In paragraph 7 of the writ petition, it is averred that the petitioner was issued with six tender forms with respect to item Nos.2, 3, 4, and 5 in Ext.P8 and also the works mentioned in Ext.P9. Serial No.2, 3, 4 and 5 of Ext.P8 tender notice read thus; |കകമ<br>നമ<br>ർ|പകപപ<br>ജകക<br>നമർ|പദതതയയപട<br>പപര`|അടങ<br>ൽ<br>തയക|ഇഎഎ<br>ഡത|ഫപറഎ വതല<br>+12%ജത<br>എസ ടത+1%<br>പസസ|കപലപവധത| |---|---|---|---|---|---|---| |xxx|xxx|xxx|xxx|xxx|xxx|xxx| |2|135/20|സപൻഡതഎഗ കമറത<br>പചയർമപൻമപർകക<br>കകപബതൻ<br>നതർമപണഎ|100000|2500|500+60+5|2മപസഎ| |3|40/20|വപയപജനങൾകക<br>കപസപറപളളഎ<br>ഫപസകയഎ<br>വതതരണഎ|450000|11250|900+113+9|2മപസഎ| |4|175/20<br>ക|കതടപളപരപഗതകൾക<br>ക<br>(പപലതപയററവ)<br>കടതൽ വതതരണഎ|ക<br>400000|10000|800+100+8|2മപസഎ| |5|132/20|ഐ എസ ഒ<br>മയപനപരയക<br>കപവർതനങൾ<br>(പറപകപർഡ ററഎ<br>കകപബതൻ<br>നതർമപണഎ)|200000|5000|500+60+5|2മപസഎ| Serial Nos. 1 and 2 in Ext.P9 tender notice read thus; |കകമ<br>നമർ|പബപർഡതനപറ<br>തരഎ|അടങൽ<br>തയക|എണ,|ഇഎഎഡത|കപലപവധത| |---|---|---|---|---|---| |1|വകകതഗത<br>വർകയകൾ|360000|120||| W.P.(C)No.28941 of 2019(P) ::9:: **==> picture [394 x 83] intentionally omitted <==** 13. The petitioner submitted Ext.P10 representation dated 15.10.2019, before the 2[nd] respondent, seeking cancellation of the tender process pursuant to Exts.P8 and P9 on the ground that the tender conditions are very vague, without giving specifications, etc. The document marked as Exts.P11 and P11(a) are receipts acknowledging the receipt of Ext.P10 complaint in respect of Exts.P8 and P9 tender notices. Thereafter, on 29.10.2019, the petitioner filed this writ petition before this Court seeking the reliefs stated hereinbefore. 14. A counter affidavit has been filed by respondents 1 and 2 opposing the reliefs sought for in this writ petition. In the counter affidavit, it is stated that the petitioner submitted Ext.R2(a) request dated 11.10.2019 before the 2[nd] respondent for issuance of tender forms, after granting exemption from tender fee, Earnest Money Deposit and bid security, in respect of item Nos.1 to 5 in Ext.P8 tender notice and item Nos.1 and 2 in Ext.P9 tender notice, on the ground that it is a Micro and Small Enterprise having registration with the National Small Industries Corporation Ltd. Based on Ext.R2(a) request, the petitioner was issued with six tender forms, W.P.(C)No.28941 of 2019(P) ::10:: i.e., 5 tender forms in respect of item Nos.1 to 5 in Ext.P8 and 1 tender form in respect of item Nos.1 and 2 in Ext.P9. After the receipt of tender forms, the petitioner did not make any complaint or sought any clarification. The petitioner was well aware that the last date of submitting tender was on 15.10.2019, at 3.00 PM, and the opening of the tender was at 4.00 PM on the same day. The tenders were opened at 4.00 PM on 15.10.2019. The Council of the 1[st] respondent Grama Panchayat, vide its decision dated 18.10.2019, accepted tender proceedings and directed the 2[nd] respondent Secretary to enter into agreements with the lowest tenderers. 15. In paragraph 4 of the counter affidavit, it is averred that, though the petitioner company obtained six tender forms, it did not submit tender for item Nos.1 to 5 in Ext.P8 tender notice except item No.3 and item Nos.1 and 2 in Ext.P9 tender notice. Item No. 3 in Ext.P8 tender notice is Project No.40/20 - purchasing casserole and flask for elderly people. The document marked as Ext.R2(b) is the tender submitted by the petitioner, on 15.10.2019, in respect of item No.3. Other than the petitioner, respondents 3 and 4 have also submitted tenders with respect to that item. Ext.R2(c) is the tender tabulation statement in respect of item No.3 in Ext.P8 tender notice, containing details of the tenders submitted by the petitioner and W.P.(C)No.28941 of 2019(P) ::11:: respondents 3 and 4. Among the tenderers, the 4[th] respondent quoted the lowest amount. In the remarks column, as against the petitioner and the 3[rd] respondent, it is noted that the tenderer is not actual supplier and therefore, the tender can be rejected. As against the 4[th] respondent, in the remarks column, it is noted that its tender can be accepted. As evident from Ext.R2(d), the Panchayat Council, vide decision No.03.24 dated 18.10.2019, accepted the tender of the 4[th] respondent and the Supervisor of ICDS was authorised to enter into agreement with the said respondent for the purchase of the articles. On the very same day, similar decision was taken to retender item No.11 in Ext.P8 tender notice, as there was only one tender. Pursuant to Ext.R2(d) decision of the Panchayat Council, vide Ext.R2(f) letter dated 21.10.2019, the 4[th] respondent was called upon to enter into an agreement with the ICDS Supervisor. Thereafter, the 4[th] respondent executed an agreement and complied with the formalities for finalising the tender in respect of item No.3 in Ext.P8 tender notice and it was concluded. Respondents 1 and 2 would point out that the petitioner filed this writ petition after the conclusion of tender process in favour of the 4[th] respondent and after execution of the agreement. 16. In the counter affidavit, it is stated that the petitioner, which is a company registered under the Companies Act, in the field W.P.(C)No.28941 of 2019(P) ::12:: of construction, had no experience in the field of distribution and supply of articles mentioned in Exts.P8 and P9 tender notices. Ext.P3 shows the major activities and filed of services of the petitioner company, as per which it is entitled for operation as an entity registered under Micro, Small and Medium Enterprises Development Act, with respect to construction and civil engineering filed only. In fact, the petitioner mislead the Panchayat officials by claiming benefit of of Ext.P5 order and procured tender forms without paying the fee required for the same and submitted tenders without depositing the earnest money. The petitioner, on the basis of Ext.P4, made an attempt to interpret the service and activities coming under Micro, Small and Medium Enterprises Development Act to make it appear that, once registered under that Act, the registered entity can enter into any field of services mentioned in Ext.P4. The petitioner is a registered entity, which comes within Clause 3 of Ext.P4, i.e., construction and related engineering services. Therefore, the petitioner's claim for right under Clause 4 of Ext.P4 is unsustainable. 17. In the counter affidavit, it is also pointed out that the document marked as Ext.P7 is incomplete and the remaining portion of Ext.P7 has been purposefully suppressed. A reading of Ext.P7 would show that the petitioner, as a Micro and Small Enterprise W.P.(C)No.28941 of 2019(P) ::13:: registered under the Micro, Small and Medium Enterprises Development Act is eligible for participation in the Central Government Store Purchase Programme for service of items as per the list attached to that certificate and there is only one item. The document marked as Ext.R2(g) is the full set of Ext.P7, which was submitted by the petitioner, while purchasing the tender forms. As per Ext.R2(g), the service and activities of the petitioner company is in respect of construction of building and civil engineering works, specialised construction activities and forestry work, as per the rules of the Kerala Public Works Department and Wild Life Department. Therefore, respondents 1 and 2 would point out that the petitioner misrepresented the certificate and registration and obtained tender forms free of cost, without paying the statutory GST and other fees and therefore, the Panchayat is entitled to recover the same from the petitioner. The petitioner has also made an attempt to mislead this Court by citing its registration under the Micro, Small and Medium Enterprises Development Act and played fraud upon the Court. For suppression of material facts and for non-production of full set of Ext.P7 certificate, the petitioner company is liable to be proceeded against. 18. After the filing of the counter affidavit, the petitioner has filed I.A.No.1 of 2020 seeking an order to amend the writ petition by W.P.(C)No.28941 of 2019(P) ::14:: incorporating additional statement of facts, grounds and reliefs, which was allowed by this Court by the order dated 17.01.2020. In the affidavit filed in support of that interlocutory application, it is stated that, filing of such an application is necessitated on account of Ext.R2(c) decision taken by the Panchayat Council. 19. The Micro, Small and Medium Enterprises Development Act, 2006 is enacted by the Parliament to provide for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental thereto. Clause (e) of Section 2 of the Act defines 'enterprise' to mean an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 or engaged in providing or rendering of any service or services. Clause (g) of Section 2 defines 'medium enterprise', to mean an enterprise classified as such under sub-clause (iii) of clause (a) or sub-clause (iii) of clause (b) of sub-section (1) of Section 7. Clause (h) of Section 2 defines 'micro enterprise', to mean an enterprise classified as such under sub-clause (i) of clause (a) or sub-clause (i) of clause (b) of sub-section (1) of Section 7. Clause (m) of Section 2 defines W.P.(C)No.28941 of 2019(P) ::15:: 'small enterprise', to mean an enterprise classified as such under sub-clause (ii) of clause (a) or sub-clause (ii) of clause (b) of subsection (1) of Section 7. Clause (n) of Section 2 defines 'supplier', to mean a micro or small enterprise, which has filed a memorandum with the authority referred to in sub-section (1) of Section 8, and includes- (i) the National Small Industries Corporation, being a company, registered under the Companies Act, 1956; (ii) the Small Industries Development Corporation of a State or a Union territory, by whatever name called, being a company registered under the Companies Act, 1956; and (iii) any company, co-operative society, trust or a body, by whatever name called, registered or constituted under any law for the time being in force and engaged in selling goods produced by micro or small enterprises and rendering services which are provided by such enterprises. Chapter III of the Act deals with classification of enterprises, advisory committee and memorandum of micro, small and medium enterprises. 20. Section 7 of the Act deals with 'classification of enterprises'. As per sub-section (1) of Section 7, notwithstanding anything contained in section 11B of the Industries (Development and Regulation) Act, 1951, the Central Government may, for the purposes of this Act, by notification and having regard to the provisions of sub-sections (4) and (5), classify any class or classes of W.P.(C)No.28941 of 2019(P) ::16:: enterprises, whether proprietorship, Hindu undivided family, association of persons, co-operative society, partnership firm, company or undertaking, by whatever name called, (a) in the case of the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951, as (i) a micro enterprise, where the investment in plant and machinery does not exceed twenty five lakh rupees; (ii) a small enterprise, where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five crore rupees; or (iii) a medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees; (b) in the case of the enterprises engaged in providing or rendering of services, as (i) a micro enterprise, where the investment in equipment does not exceed ten lakh rupees; (ii) a small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees; or (iii) a medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees. In Explanation 1, for the removal of doubts, it is clarified that in calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other items as may W.P.(C)No.28941 of 2019(P) ::17:: be specified, by notification, shall be excluded. In Explanation 2, it is clarified that the provisions of section 29B of the Industries (Development and Regulation) Act, 1951 (65 of 1951, shall be applicable to the enterprises specified in sub-clauses (i) and (ii) of clause(a)of sub-section(1)of this section. 21. Section 9 of the Act deals with 'measures for promotion and development'. As per Section 9, the Central Government may, from time to time, for the purposes of facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises, particularly of the micro and small enterprises, by way of development of skill in the employees, management and entrepreneurs, provisioning for technological upgradation marketing assistance or infrastructure facilities and cluster development of such enterprises with a view to strengthening backward and forward linkages, specify, by notification, such programmes, guidelines or instructions, as it may deem fit. 22. Section 10 of the Act deals with 'credit facilities'. As per Section 10, the policies and practices in respect of credit to micro, small and medium enterprises shall be progressive and such as may be specified in the guidelines or instructions issued by the Reserve Bank, from time to time, to ensure timely and smooth flow of credit to such enterprises, minimise the incidence of sickness among and W.P.(C)No.28941 of 2019(P) ::18:: enhance the competitiveness of such enterprises. Section 11 of the Act deals with 'Procurement Preference Policy'. As per Section 11, for facilitating promotion and development of micro and small enterprises, the Central Government or the State Government may, by order notify from time to time, preference policies in respect of procurement of goods and services, produced and provided by micro and small enterprises, by its Ministries or departments, as the case may be, or its aided institutions and public sector enterprises. 23. As per a Micro and Small Enterprise is entitled for issue of tender sets free of cost; exemption from payment of Earnest Money; waiver of Security Deposit upto the monetary limit for which the unit is registered; Price Preference upto 15% over the quotation of large scale units; etc. In Ext.P6, in modification of the Government order dated 26.09.2013, it was decided to extend various benefits of Public Procurement Policy to the Micro and Small Enterprises in Kerala, as per which, in tender, participating Micro and Small Enterprises quoting price within price band of L1 + 15% shall also be allowed to supply 20% of the total tendered value. In the instant case, as evident from the renewal certificate dated 29.08.2019 issued by the National Small Industries Corporation Limited, a full set of which is placed on record as Ext.R2(g) along with the counter affidavit filed by respondents 1 and 2, the service/activity of the petitioner W.P.(C)No.28941 of 2019(P) ::19:: company is construction of buildings, civil engineering works, specialised construction activities and forestry works, as per the rules of the Kerala Public Works Department and Kerala Wildlife Department. Though the petitioner company was not entitled for issuance of tender forms exemption from payment of Earnest Money; waiver of Security Deposit, etc., based on Ext.R2(a) request, the petitioner company was issued with six tender forms, i.e., 5 tender forms in respect of item Nos.1 to 5 in Ext.P8 and 1 tender form in respect of item Nos.1 and 2 in Ext.P9. After obtaining such tender forms the petitioner submitted tender only in respect of item No.3 in Ext.P8 tender notice, i.e., Project No.40/20 - purchasing casserole and flask for elderly people. The document marked as Ext.R2(b) is the tender submitted by the petitioner company. Thereafter, the petitioner company moved this writ petition before this Court suppressing material facts, by producing an incomplete document as Ext.P7 renewal certificate and secured an interim order from this Court by moving the writ petition as 'today motion'. The conduct of the petitioner company in producing only the first page of Ext.P7 renewal certificate of registration, in order to suppress its ineligibility from the notice of this Court, cannot be viewed lightly. At any rate, the action of respondents 1 and 2 in rejecting the tender submitted by the petitioner company cannot be said to be either W.P.(C)No.28941 of 2019(P) ::20:: arbitrary or illegal and as such no interference of this Court is warranted on the tender process pursuant to Exts.P8 and P9 tender notices. 24. As stated by Scrutton, L.J., in **R. v. Kensington Income Tax Commissioners [(1917) 1 KB 486]** , an applicant who does not come with candid facts and 'clean breast' cannot hold a writ of the Court with 'soiled hands'. Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, maneuvering or misrepresentation, which has no place in equitable and prerogative jurisdiction. ## 25. In **Prestige Lights Limited v. State Bank of India** **[(2007) 8 SCC 449]** the Apex Court reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed W.P.(C)No.28941 of 2019(P) ::21:: or are distorted, the very functioning of the writ courts would become impossible. 26. In **Prestige Lights Limited** the Apex Court held further that, under Article 226 of the Constitution of India, the High Court is exercising discretionary and extraordinary jurisdiction. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the court, the writ court may refuse to entertain the petition and dismiss it without entering into merits of the matter. Paragraphs 33 and 34 of the said judgment read thus: “33. It is thus clear that though the appellant-Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. W.P.(C)No.28941 of 2019(P) ::22:: 34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in **R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136 (CA)]** , in the following words: "It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts - facts, not law. He must not misstate the law if he can help it - the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement." 27. In **K.D. Sharma v. Steel Authority of India Ltd.** **[(2008) 12 SCC 481]** , the Apex Court held that the party who invokes the extraordinary jurisdiction of the Apex Court under Article 32 or of a High Court under Article 226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts without any reservation even if they are against him. He cannot be allowed to play 'hide and seek' or to 'pick and choose' the facts he likes to disclose and to suppress (keep back) or not to disclose (conceal) other facts. The very basis of the writ jurisdiction rests in disclosure of true and complete (correct) facts. If material facts are suppressed or distorted, the very functioning of writ Courts W.P.(C)No.28941 of 2019(P) ::23:: and exercise would become impossible. The petitioner must disclose all the facts having a bearing on the relief sought without any qualification. This is because, "the Court knows law but not facts". In the said decision, the Apex Court held further that, if the primary object as highlighted in **R. v. Kensington Income Tax Commissioners [(1917) 1 KB 486]** is kept in mind, an applicant who does not come with candid facts and 'clean breast' cannot hold a writ of the Court with 'soiled hands'. Suppression or concealment of material facts is not an advocacy. It is a jugglery, manipulation, maneuvering or misrepresentation, which has no place in equitable and prerogative jurisdiction. If the applicant does not disclose all the material facts fairly and truly but states them in a distorted manner and misleads the court, the court has inherent power in order to protect itself and to prevent an abuse of its process to discharge the rule nisi and refuse to proceed further with the examination of the case on merits. If the court does not reject the petition on that ground, the court would be failing in its duty. In fact, such an applicant requires to be dealt with for Contempt of Court for abusing the process of the court. ## 28. In **Usha Nanthini v. Regional Transport Authority,** **Palakkad and another [2018 (2) KHC 89]** this Court held that, once it is found that the petitioner has approached this Court W.P.(C)No.28941 of 2019(P) ::24:: invoking the extraordinary jurisdiction under Article 226 of the Constitution of India by suppressing material facts and making false statements, such an attempt made by the petitioner to abuse the process of this Court has to be dealt with appropriately. In such cases this Court has ample power to decline the permission sought for withdrawal of the writ petition. Dismissal of such writ petitions imposing exemplary costs is inevitable, in order to prevent abuse of process of this Court and to preserve purity of judicial proceedings. Paragraphs 26 to 28 of the said judgment read thus: “26. In Dnyandeo Sabaji Naik v. Pradnya Prakash Khadekar [(2017) 5 SCC 496] : [2017 SCC Online SC 211] a Three-Judge Bench of the Apex Court held that the Court must view with disfavour any attempt by a litigant to abuse the process. The sanctity of the judicial process will be seriously eroded if such attempts are not dealt with firmly. A litigant who takes liberties with the truth or with the procedures of the Court should be left in no doubt about the consequences to follow. Others should not venture along the same path in the hope or on a misplaced expectation of judicial leniency. Exemplary costs are inevitable, and even necessary, in order to ensure that in litigation, as in the law which is practised in our country, there is no premium on the truth. 27. A litigant who invokes the extraordinary jurisdiction of this Court under Art.226 of the Constitution must come with clean hands and clean objects. Any attempt made by a litigant to mislead this Court, either by suppressing materials facts or by filing false affidavits or giving false statements should be W.P.(C)No.28941 of 2019(P) ::25:: curbed with an iron hand. A litigant has every right to withdraw the writ petition filed under Art.226 of the Constitution. However, once it is found that he has approached this Court suppressing materials facts or by filing false affidavits or giving false statements, this Court has ample power to decline the permission sought for withdrawal of that writ petition. Dismissal of such writ petitions imposing exemplary costs is inevitable, and even necessary, in order to prevent abuse of the process of this Court and to preserve the purity of judicial proceedings. 28. In the instant case, a reading of the reply affidavit filed by the petitioner dated 09/01/2018 would show that the said affidavit has been drafted in a casual manner harbouring the notion that this Court is required to grant permission for withdrawal of the writ petition as a matter of course. Once it is found that the petitioner has approached this Court suppressing materials facts and making false statements, such an attempt made by the petitioner to abuse the process of this Court has to be dealt with appropriately. In such circumstances, the dismissal of this writ petition imposing exemplary costs is inevitable, declining the permission sought for withdrawal of the same.” 29. Therefore, it is well settled that, a litigant who invokes the extraordinary jurisdiction of this Court under Article 226 of the Constitution must come with clean hands and clean objects. The judicial proceedings are sacrosanct, and no person would be allowed to abuse the judicial process, particularly, in public law remedy. In writ proceedings, the Court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has been asserted. Since Article 226 of the W.P.(C)No.28941 of 2019(P) ::26:: Constitution of India espouses equity jurisprudence, a litigant who has approached the Court with unclean hands, without disclosing full facts, is not entitled for any reliefs. 30. As held by the Apex Court in **Dnyandeo Sabaji Naik** a litigant who takes liberties with the truth or with the procedures of the Court should be left in no doubt about the consequences to follow. Others should not venture along the same path in the hope or on a misplaced expectation of judicial leniency. Exemplary costs are inevitable, and even necessary, in order to ensure that in litigation, as in the law which is practised in our country, there is no premium on the truth. 31. Therefore, once it is found that the petitioner company has approached this Court suppressing material fact from the notice of this Court, that calculated attempt made to secure an interim order by misleading this Court has to be dealt with appropriately. In such circumstances, the dismissal of this writ petition imposing exemplary cost is inevitable. Since the petitioner company is not entitled for issue of tender sets free of cost, exemption from payment of Earnest Money, etc., respondents 1 and 2 shall be entitled to recover the said amount from the petitioner company together with GST and other statutory dues. In the result, this writ petition is dismissed imposing a cost of W.P.(C)No.28941 of 2019(P) ::27:: Rs.1,00,000/- (Rupees One Lakh only) payable by the petitioner company to the 1[st] respondent Grama Panchayat, within three weeks from the date of receipt of a certified copy of this judgment, together with the amount payable by the petitioner company towards cost of tender sets, GST and other statutory dues, etc. The amount paid by the petitioner company towards costs shall be utilised by the 1[st] respondent Grama Panchayat for any relief work in connection with Covid-19, based on the decision to be taken by the Panchayath Committee, after complying with the statutory requirements. In case of any default on the part of the petitioner company in remitting the aforesaid amount, the 1[st] respondent Grama Panchayat will be entitled to realise the said amount by proceeding against the petitioner company and its Managing Director by initiating coercive steps under the provisions of the Kerala Revenue Recovery Act. **Sd/ANIL K. NARENDRAN JUDGE** das ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF THE REGISTRATION CERTIFICATE ISSUED BY THE REGISTRAR OF COMPANIES.** - **EXHIBIT P2 TRUE COPY OF CERTIFICATE OF INCORPORATION UNDER THE REGISTRAR OF COMPANIES.** - **EXHIBIT P3 TRUE COPY OF THE MSME REGISTRATION FOR SERVICE ENTERPRISES.** - **EXHIBIT P4 TRUE COPY OF D.O. NO.2(3)/1/2007-MSME POL DATED 16.11.2017.** - **EXHIBIT P5 TRUE COPY OF THE ORDER OF THE DEVELOPMENT COMMISSIONER AS PER FILE NO.25(2)/2011-MA DATED 14.10.2011.** - **EXHIBIT P6 TRUE COPY OF G.O(P) NO.546/2013/FINANCE DATED 07.11.2013.** - **EXHIBIT P7 TRUE COPY OF THE CERTIFICATE OF REGISTRATION WITH NATIONAL SMALL INDUSTRIES CORPORATION LTD, DATED 29.08.2019.** - **EXHIBIT P8 TRUE COPY OF THE TENDER INVITED BY THE 2ND RESPONDENT DATED 03.10.2019 FOR THE SUPPLY OF SEVERAL ITEMS.** - **EXHIBIT P9 TRUE COPY OF THE TENDER NO.A6/1069/2019 INVITED BY THE 2ND RESPONDENT DATED 03.10.2019.** **EXHIBIT P10 TRUE COPY OF THE REPRESENTATION OF THE PETITIONER DATED 15.10.2019. EXHIBIT P11 TRUE COPY OF THE RECEIPT ISSUED BY THE 2ND RESPONDENT. EXHIBIT P11 A TRUE COPY OF THE RECEIPT ISSUED BY THE 2ND RESPONDENT.**