M/S PRAKASH CONSTROWELL LIMITED v. KERALA STATE INFORMATION TECHNOLOGY INFRASTRUCTURE LTD. and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** # **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** # **WEDNESDAY,THE 19TH DAY OF SEPTEMBER 2018 / 29TH SRAVANA, 1940** **WP(C).No. 26489 of 2018** ## **PETITIONER** ## **M/S PRAKASH CONSTROWELL LIMITED** **THE EXCHANGE, NEAR VED MANDIR, TICKDE COLONY,TRIMBAK ROAD, NASHIK - 422 002 REPRESENTED BYITS AUTHORIZED SIGNATORY JAMES JOSEPH, S/O.JOSEPH,AGED 50 YEARS, VADAKKAKUTTE HOUSE, ALAKODE P.O.,KANNUR DISTRICT - 670 571.** **BY ADV. SRI.PAUL K.VARGHESE** ## **RESPONDENTS:** - **1 THE KERALA STATE INFORMATION TECHNOLOGY INFRASTRUCTURE LTD.** **TC.NO.14/196/2, 3RD FLOOR, CHANDRASEKHARAN NAIR STADUMPALAYAM, TRIVANDRUM - 695 033 REPRESENTED BY ITS CHAIRMAN.** **2 THE CHIEF EXECUTIVE OFFICER (CEO) KERALA STATE INFORMATION TECHNOLOGYINFRASTRUCTURE LTD., TC.NO.14/196/2, 3RD FLOOR, CHANDRASEKHARAN NAIR STADUMPALAYAM, TRIVANDRUM - 695 033 3 THE MANAGING DIRECTOR (MD), KERALA STATE INFORMATION TECHNOLOGYINFRASTRUCTURE LTD., TC.NO.14/196/2, 3RD FLOOR,CHANDRASEKHARAN NAIR STADUMPALAYAM, TRIVANDRUM - 695 033** - **4 THE SENIOR TECHNICAL ADVISER (KALAMASSERY PROJECT) KERALA STATE TECHNOLOGYINNOVATIONS ZONE, KALAMASSERY, KOCHI - 683 104.** W.P.(C).No.26489/18 2 - **5 THE URALUNGAL LABOUR CONTRACT CO-OPERATIVE SOCIETY, MADAPPALLY COLLEGE,VADAKARA, KOZHIKODE - 673 102 REPRESENTED BY ITSPRESIDENT.** **6 THE CENTRAL VIGILANCE COMMISSION SATARKATA BHAVAN, A BLOCK, GPO COMPLEX,INA NEW DELHI, PIN - 110 023 REPRESENTED BYOTS COMMISSIONER.** **BY ADVS.** **SRI.M.SASINDRAN SRI.K.A.ABDUL SALAM SC KERALA STATE IT INFRASTRUCTURE LTD. KSITIL FOR R1 AND R3** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20/08/2018, THE COURT ON 19.09.2018 DELIVERED THE FOLLOWING:** W.P.(C).No.26489/18 3 ## **JUDGMENT** ## 1. The prayer in this writ petition is as follows:- i)Call for the records leading to Exhibit P6 and P8 and quash the same by issuing a writ of certiorari or other appropriate writ, order or direction. ii)Declare that awarding the Building work of Technology Innovation Zone to the 5[th] respondent without making any discussion with the petitioner are arbitrary, illegal and violation of Article 14 and Article 19(1)(G) of Constitution of India and hence void. iii)Issue a writ of mandamus or other appropriate writ, order or direction commanding respondent Nos.1 to 4 to award the Building work of Technology Innovation Zone Kalamassery to the petitioner without any delay.” - 2.Heard the learned counsel for the petitioner, learned counsel appearing for the respondents. 3. The petitioner, who is a private limited company holding an 'A' class contractor licence, challenges the award of work tendered by Exhibit P1 notice to the 5[th] respondent, a Labour Contract Co-operative Society. The petitioner contends that the work tendered was for construction of a building for the Technology Innovation Zone at Kalamassery with an area of more than two lakhs square feet. It is stated that the petitioner had bid the lowest amount in the tender, but the W.P.(C).No.26489/18 4 work had been awarded to the 5[th] respondent. It is stated that going by the provisions of Exhibits P9 to P11 Government Orders, the 5[th] respondent has to seek accreditation from the Government and the accreditation which the 5[th] respondent has been granted in Exhibit P12 permits the entrustment of works upto Rs.25 crores alone and the maximum value of work in hand at one time could only be Rs.250 crores. Relying on Exhibits P13 and P14 orders, it is contended that the 5[th] respondent is not entitled to any preferential treatment in the matter of award of work. It is stated that requiring a due process to be carried out and then permitting the society to meet the lowest tender and awarding the work at those rates to the society would amount to abdication of the entire efficacy of the tender process and is also violative of the rights of the petitioner. 4.The decisions of the Apex Court in **Sachidnand Pandey v. State of West Bengal** [(1987) 2 SCC 295], **R.D.Shetty v. International Airport Authority** , **Sterling Computers Ltd.v. M & N Publications Ltd.** [(1993) 1 SCC 445] and **Centre for Public Interest Litigation v. Union of India** W.P.(C).No.26489/18 5 **and others** [(2012) 3 SCC 1] are relied upon to contend that the procedure adopted by respondents 1 to 4 in the award of work is per se illegal and unsustainable. 5.A detailed counter affidavit has been filed on behalf of the 5[th] respondent. It is submitted as follows:- “As regards the averments in paragraph 3 of the writ petition that the 5[th] respondent has quoted less amount than the petitioner, it is submitted that though the total amount shown was more than the amount shown by the petitioner, such mentioning of a higher amount was on account of a mistake and based on the quoting made for different works separately, the total amount quoted by the 5[th] respondent would come to Rs.878974739/- that is about Rs.10 lakhs below the amount quoted by the petitioner. It is submitted that the mistake was found out subsequently and on intimation, the 5[th] respondent was also realised about the mistake and therefore the quoted amount would be only 878974739/- only. In view of the fact that based on the rectification in the calculation the 5[th] respondent is the lowest tenderer and there is no basis for the contention made by the petitioner.” ## 6.It is stated that even if the averments of the petitioner in the writ petition are accepted, the 5[th] respondent is entitled to price preference on the basis of competent orders issued by the Government. Exhibits R5(a) to (c) Government Orders are W.P.(C).No.26489/18 6 relied on to contend that priority benefits and price preferences, as also exemption from payment of security deposit and earnest money is provided for in respect of the 5[th] respondent Society. It is stated that the Government Orders specifically provide that in case private contractors had quoted the lowest rate, the labour contract society which has quoted the work will be given preference in awarding contracts at 10% above the lowest, if the society is willing to do the work. The said Government Orders are not under challenge. It is also contended that this Court had considered similar contentions and held that contract can be awarded to the Government owned firms even without such a stipulation in the tender notice. The decision in **Biodigital (P) Ltd. v. State of Kerala** [ILR 2010(4) Kerala 462] is relied on in support of this contention. It is also stated that the 5[th] respondent is a Labour Contract Society, having impeccable track record and Government Orders have also been issued exempting the cap of maximum value of work which can be awarded to the 5[th ] respondent, in view of the performance in taking up and completing the works in time. It is further contended that Exhibits P9 to P14 orders and circulars relate W.P.(C).No.26489/18 7 to the award of the works to corporate entities, including cooperative societies without inviting tenders have no application in the instant case, where the 5[th] respondent society has participated in the tender and has been awarded the work at Rs.87,89,74,739/-, which is below the amount admittedly quoted by the petitioner. 7.The learned Standing Counsel appearing for respondents 1 and 3 would submit that the 5[th] respondent, who had also participated in the tender had only been given price preference which is under the provisions of the Government Orders in force. It is stated that though the availability of the price preference to the Co-operative society was not specifically stated in the tender notice. The petitioner, who are 'A' class contractors, are well aware of the stipulations of the Government orders and of the fact that the price preference is available to the 5[th] respondent. It is stated that the rate quoted by the petitioner was Rs.87,98,62,885/- and the 5[th] respondent has been awarded the work at Rs.87,89,74,739/- . It is contended that in absence of any allegation of mala fide and in view of the fact that the work has been commenced W.P.(C).No.26489/18 8 from 1.8.2018 and is ongoing, the writ petition is liable to be dismissed. 8.The learned Standing Counsel appearing for respondents 1 and 3 would further contend that the petitioner is a company incorporated in Nasik, while the 5[th] respondent is a Cooperative Society, which has been carrying out contract works in all departments in various parts of Kerala. It is stated that the track record of the 5[th] respondent is accepted and that it would only be in public interest to award the work to the Co-operative Society of workers in which the Government has 90.60% shares. It is submitted that majority of the works bid by the petitioner had been completed within time and due to the very nature of the 5[th] respondent, there are very few disputes in the conduct of the works in question. 9.I have considered the contentions advanced. It is beyond dispute that award of work by a Government department or an instrumentality of the State has to answer the conditions of fair play and lack of arbitrariness. The purpose of inviting tenders is to ensure that the work is carried out with the W.P.(C).No.26489/18 9 maximum efficiency and at the lowest possible price. The Government is undoubtedly within its power in carving out preferences in favour of Government owned institutions and as in the instant case, Co-operative societies. The Government, in its wisdom, has issued orders granting preferences in favour of Labour Contract Co-operative Societies. The intention undoubtedly would be to encourage such cooperative societies to engage in Government contracts in preference to private contractors, wherever such preference is contemplated. In the instant case, the provisions of the Government Orders have been given effect to giving the 5[th] respondent a chance to meet the lowest tender. As a matter of fact, it appears that the bid of the 5[th] respondent has been accepted at a rate which was lower than the lowest tender made by the petitioner. In the light of the provisions of the Government orders and taking note of the contentions of the parties, I am unable to hold that the award of the work, which does not go beyond the benefits as provided in the Government orders to the 5[th] respondent Co-operative society, is vitiated in any manner. No loss has been occasioned to the Government by the award of the work to the 5[th] respondent. I W.P.(C).No.26489/18 10 am of the opinion that the challenge against the award of work to the 5[th] respondent, therefore, must necessarily fail. I notice that there is no challenge to the Government orders relied on by the 5[th] respondent and therefore the question of legality of those orders do not be required to be considered in this writ petition. The writ petition fails and is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj W.P.(C).No.26489/18 11 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P9: A TRUE COPY OF G.O.9P).NO.311/14/FIN DATED 30/07/2014 ALONG WITH ANNEXURE - I AND II** **EXT.P1: A TRUE COPY OF THE RELEVANT PAGES OF THE TENDER ISSUED BY THE RESPONDENTS NOS.1 TO 4 EXT.P2: A TRUE COPY OF THE TENDER SUMMARY REPORTS PUBLISHED BY THE RESPONDENTS 1 TO 4 FOR THE CONSTRUCTION OF BUILDING OF TECHNOLOGY INNOVATION AT KALAMASSERY DATED 09/04/2018 EXT.P3: A TRUE COPY OF THE SUMMARY DETAILS PUBLISHED BEFORE THE RESPONDENTS NO. 1 TO 4 IN THEIR WEBSITE EXT.P4: A TRUE COPY OF THE LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 20/04/2018 EXT.P5: A TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT DATED 19/05/2018 EXT.P6: A TRUE COPY OF THE TENDER SUMMARY REPORT DATED 22/07/2018 PUBLISHED BY THE RESPONDENTS' NO.1 TO 4 IN THEIR WEBSITE EXT.P7: A TRUE COPY OF THE LETTER SUBMITTED BY THE PETITIONER TO THE CHIEF MINISTER AND OTHERS DATED 21/07/2018 EXT.P8: A TRUE COPY OF THE FINANCIAL EVALUATION REPORT PUBLISHED BY THE 1ST RESPONDNET IN THEIR WEBSITE** W.P.(C).No.26489/18 12 - **EXT.P10:** **A TRUE COPY OF G.O.(MS) NO.423/14/FIN DATED 26/29/2014** - **EXT.P11:** - **A TRUE COPY OF THE G.O.(P) NO.11/2015/FIN DATED 08/01/2015** - **EXT.P12: A TRUE COPY OF THE G.O.9P) NO.339/2015/FIN DATED 07/08/2015** - **EXT.P13: A TRUE COPY OF GO (P) NO.133/2016/FIN DATED 01/09/2016** - **EXT.P14: A TRUE COPY OF CIRCULAR NO.23/07/07 DATED 05/07/2007 ISSUED BY THE CENTRAL VIGILANCE COMMISSION** - **EXT.P15: A TRUE COPY OF THE APPLICATION SUBMITTED BY THE BUILDERS ASSOCIATION OF INDIA AS PER RIGHT TO INFORMATION ACT TO THE JOINT REGISTER OF COOPERATIVE SOCIETIES** - **EXT.P16: A TRUE COPY OF THE REPLY GIVEN BY PUBLIC INFORMATION OFFICER, DEPUTY REGISTRAR (ADMINISTRATION) DATED 19/01/2017** - **EXT.P17: A TRUE COPY OF THE RELEVANT PAGES OF WEBSITE OF THE 5TH RESPONDENT** - **EXT.P18: A TRUE COPY OF THE CIRCULAR NO.1812/12 ISSUED BY CENTRAL VIGILANCE COMMISSION DATED 11/12/2012** W.P.(C).No.26489/18 13 ## R **ESPONDENTS' EXHIBITS** **EXT.R5(A): A TRUE COPY OF THE GO(P) NO.135/97 DATED 13.11.1997** **EXT.R5(B): A TRUE COPY OF THE GO(MS) NO.44/01/PWD DATED 19.3.20104** **EXT.R5(C):A TRUE COPY OF THE GO DATED 2.8.2008.** **EXT.R5(D): A TRUE COPY OF THE CERTIFICATE ISSUED BY THE ASSISTANT REGISTRAR OF THE COOPERATIVE SOCIETY** **EXT R5(E) A TRUE COPY OF THE JUDGMENT REPORTED IN ILR 2010 (4) KER.462** **True copy** **P.S to Judge**