High Court of KeralaSingle JudgePetition dismissed

N SOMAKUMAR and Others v. KERALA WATER AUTHORITY and Others

Case / Petition Number:WP(C).No. 8756 of 2014 (T)

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • A.M. Shaffique
Judgment Date
2014-07-09
Court Decision / Holding
Writ petition dismissed; cancellation of the tender and initiation of retendering were upheld; no interference with the respondent authority’s decision-making process.
Final Disposition
Petition dismissed

Parties to the Case

Appellants / Petitioners

  • N SOMAKUMAR
  • S.VIHAR
  • D.DEVARAJ
  • T.VIJAYAN
  • S.REGHUKUMARAN NAIR
  • P.BAHULEYAN
  • SAJI KUMA RUNNING CONTRACT
  • ROBERT
  • S.PRADEEP KUMAR S
  • SIMON T.J.
  • A.AJI PUTHUVAL PUTHEN VEEDU
  • SREEKUMAR

Respondents

  • KERALA WATER AUTHORITY
  • SUPERINTENDING ENGINEER, PUBLIC HEALTH CIRCLE, KERALA WATER AUTHORITY
  • EXECUTIVE ENGINEER, WATER SUPPLY DIVISION, KERALA WATER AUTHORITY, NEYYATTINKARA
  • TECHNICAL ASSISTANT IN CHARGE OF EXECUTIVE ENGINEER, WATER SUPPLY DIVISION, KERALA WATER AUTHORITY, NEYYATTINKARA
  • EXECUTIVE ENGINEER, SEWERAGE DIVISION, PATTOOR, KERALA WATER AUTHORITY
  • ANIL KUMAR.S.
  • SHAJAHAN
  • T.L.DIKSON
  • SREEKANTAN
  • THANKAPPAN
  • VIMAL KUMAR

Legal Representation & Advocates

Counsels for Petitioners

  • • SRI.B.RADHAKRISHNA PILLAI
  • • SMT.S.AMBIKA DEVI

Counsels for Respondents

  • • SRI.JOSEPH JOHN, SC
  • • SRI.M.DINESH

Case Synopsis & Summary

The petitioners, a group of contractors registered with the Kerala Water Authority (KWA), challenge Ext. P5, a decision cancelling the electronic tender opened for 2014-2015 maintenance of pipelines at Neyyattinkara Division. After tenders were opened on 3.3.2014, the 3rd respondent allegedly cancelled the tender on grounds of “technical reasons” and perceived cartel-like misconduct, arguing that the tender process showed collusion and that retendering would ensure transparency and a better price. The petitioners, with decades of running-contract experience in leak-rectification works, contended the cancellation was arbitrary, biased, and aimed at depriving them of work to favor higher bidders. They argued that cancellation undermines transparency, and cited established jurisprudence to argue judicial review should guard against arbitrariness in public procurement. The respondents maintained that tenderers colluded, noting identical rate patterns and a narrow pool of bidders; they claim the mistake of permitting tender documents to be deposited in a box was due to inexperience and do not rely on a fixed requirement to provide reasons for cancellation, asserting public-fund protection and the right to retender. The court cites Tata Cellular and Ramana Dayaram Shetty to discuss the limits of judicial review and the state’s power to cancel/retender to prevent arbitrariness and to secure best quotations. Ultimately, the court finds the reasons for cancellation justifiable, dismissing the petition as lacking interference with the decision-making process.

Provisions of Law Cited

Constitution of India, Article 14

Legal Doctrines & Maxims

  • Principles of judicial review
  • Arbitrariness as a ground for invalidating acts
  • Equality before law (Article 14)
  • Ramana Dayaram Shetty principle (corporations subjected to same public-law limitations)
  • Tata Cellular principle (judicial review of tender decisions to prevent arbitrariness)

Submissions & Arguments

Contentions of Appellants / Petitioners

Petitioners contended that Ext. P5 cancelling the tenders after inviting bids under Ext. P3 was arbitrary, biased, and aimed at depriving them of work to the benefit of higher bidders. They highlighted their long-standing performance in running-contract works and argued that retendering would breach the principles of transparency and equal opportunity. They invoked Tata Cellular v. Union of India and Ramana Dayaram Shetty v. International Airport Authority of India to assert that decisions affecting public funds must be non-arbitrary and conform to Article 14. They claimed Ext. P7 (flex board) shows political pressure but cannot prove arbitrariness. They urged the court to require a fair process and not allow collusive tendencies to influence awards.

Contentions of Respondents

Respondents argued that tender rates indicated cartel-like behavior: similar patterns across works and excessively high bids for certain items. After finding signs of collusion, the authority cancelled the tender and opted for retendering to safeguard public funds and ensure the best quotation. They acknowledged a procedural lapse: allowing tender documents to be deposited in the division box due to inexperience with the electronic tender system, but asserted that cancellation was still a justified remedy. They relied on Tata Cellular to support judicial review limits, but maintained that the decision was rational and aimed at public interest.

Cited Precedents (2)

Case NameCitationTreatmentExplanation
Tata Cellular v. Union of India(1994) 6 SCC 651PositiveCourt relies on principles of judicial review to assess arbitrariness in tender decisions and to recognize that government may reject bids to protect public interest.
Ramana Dayaram Shetty v. International Airport Authority of India(1979) 3 SCC 489PositiveCourt cites the principle that corporations acting as government instrumentality are subject to same constitutional/public-law limitations.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** ## **WEDNESDAY, THE 9TH DAY OF JULY 2014/18TH ASHADHA, 1936** ## **WP(C).No. 8756 of 2014 (T)** **--------------------------------------** ## **PETITIONER(S):** - **----------------------** **1. N SOMAKUMAR, S.VIHAR, MANAPPURAM, MALAYANKIZHU P.O., THIRUVANANTHAPURAM-695 571.** ## **2. D.DEVARAJ,** - **USHES, VETTUCAUD, KULATHOOR, UCHAKKADA P.O., NEYYATTINKARA, THIRUVANANTHAPURAM-695571.** ## **3. T.VIJAYAN,** - **MITHUN BHAVAN, MULLUVILA P.O., NEYYATTINKARA, THIRUVANANTHAPURAM-695571.** **4. S.REGHUKUMARAN NAIR, ANAPPURA VEEDU, THALAYAL, BALARAMAPURAM P.O. THIRUVANANTHAPURAM.** **5. P.BAHULEYAN, RAM NIVAS, PULIYOORKINAM, PLAYTTUVILA P.O. NEYYATTINKARA, THIRUVANANTHAPURAM-695501.** **6. SAJI KUMA RUNNING CONTRACT, SAJI BHAVAN, KUTTARA, OTTASEKRAMANGALAM P.O. NEYYATTINKARA, THIRUVANANTHAPURAM.** ## **7. ROBERT,** - **KUTTIKKADU VEEDU, KULATHUMMAL, KUTTAKKDA P.O. NEYYATTINKARA, THIRUVANANTHAPURAM.** **8. S.PRADEEP KUMAR S, PRADEEP BHAVAN, POOVATHOOR, MANCHAVIKKOM P.O. NEYYATTINKARA, THIRUVANANTHAPURAM-695503.** **9. SIMON T.J. SAJ BHAVAN, LOURDEPURAM, KANJIRAKULAM P.O. NEYYATTINKARA, THIRUVANANTHAPURAM-695524.** **PJ** **....2/-** **..2..** **WP(C).No. 8756 of 2014 (T)** **--------------------------------------** ## **10. A.AJI PUTHUVAL PUTHEN VEEDU, KANJIRANKULAM P.O. NEYYATTINKARA, THIRUVANANTHAPURAM-695524.** ## **11. SREEKUMAR,** - **ASWATHY, PALOORKONAM, PARASALA P.O. NEYYATTINKARA, THIRUVANANTHAPURAM-6955021.** **BY ADVS.SRI.B.RADHAKRISHNA PILLAI SMT.S.AMBIKA DEVI** ## **RESPONDENT(S):** - **-------------------------** ## **1. KERALA WATER AUTHORITY,** - **REPRESENTED BY ITS MANAGING DIRECTOR, JALA BHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM-695 033.** ## **2. SUPERINTENDING ENGINEER,** - **PUBLIC HEALTH CIRCLE, KERALA WATER AUTHORITY, THIRUVANANTHAPURAM-695 001.** ## **3. EXECUTIVE ENGINEER,** - **WATER SUPPLY DIVISION, KERALA WATER AUTHORITY, NEYYATTINKARA, THIRUVANANTHAPURAM-695 121.** **4. TECHNICAL ASSISTANT IN CHARGE OF EXECUTIVE ENGINEER, WATER SUPPLY DIVISION, KERALA WATER AUTHORITY, NEYYATTINKARA, THIRUVANANTHAPURAM-695 121.** **5. EXECUTIVE ENGINEER, SEWERAGE DIVISION, PATTOOR, KERALA WATER AUTHORITY, THIRUVANANTHAPURAM-695024.** **6. ANIL KUMAR.S., RESIDING AT SHALOM HOUSE, PERUMPAROADU, AYANIMOODU, VEDIVACHANCOIL P.O., THIRUVANANTHAPURAM, PIN-695501.** **7. SHAJAHAN, FAZAL MANZIL, KIDARAKUZHY, VENGANOOR P.O.-695521, THIRUVANANTHAPURAM.** **8. T.L.DIKSON, SWAPNAM, VENKULAM, NELLIMOODU P.O., THIRUVANANTHAPURAM.** **9. SREEKANTAN, CHARUVILA PUTHEN VEEDU, PUNNATHAM, PALIYODE, KOTTAIKKAL P.O., THIRUVANANTHAPURAM.** **10. THANKAPPAN, K.S.BHAVAN, KANNARAVILA, NELLIMOODU P.O., THIRUVANANTHAPURAM.** **PJ** **....3/-** **..3..** ## **WP(C).No. 8756 of 2014 (T)** - **--------------------------------------** **11. VIMAL KUMAR, SREEPADMANAPA, KOLIYOOR, MUTTACADU P.O., THIRUVANANTHAPURAM.** **R1 - 5 BY ADV. SRI.JOSEPH JOHN, SC, KERALA WATER AUTHORITY R6-R11 BY ADV. SRI.M.DINESH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/6/14 THE COURT ON 09-07-2014, DELIVERED THE FOLLOWING:** **PJ** ## **WP(C).No. 8756 of 2014 (T) -------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** ## **-------------------------------------** **EXHIBIT P1: THE TRUE PHOTOCOPY OF THE IST PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3.** **EXHIBIT P1(A): THE TRUE PHOTOCOPY OF THE 2ND PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3.** **EXHIBIT P1(B): THE TRUE PHOTOCOPY OF THE 3RD PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3.** **EXHIBIT P1(C): THE TRUE PHOTOCOPY OF THE 4TH PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3. EXHIBIT P1(D): THE TRUE PHOTOCOPY OF THE 5TH PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3. EXHIBIT P1(E): THE TRUE PHOTOCOPY OF THE 6TH PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3.** **EXHIBIT P1(F): THE TRUE PHOTOCOPY OF THE 7THPETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3.** **EXHIBIT P1(G): THE TRUE PHOTOCOPY OF THE 8TH PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2015 BY R3. EXHIBIT P1(H): THE TRUE PHOTOCOPY OF THE 9TH PETITIONER'S C CLASS REGISTRATION CARD RENEWED UPTO 31ST MARCH 2010 BY R3** **EXHIBTI P1(HA): TRUE PHOTOCOPY OF THE 9TH PETITIONER'S B CLASS REGISTRATION CARD RENEWED UPTO 31.3.2015 BY THE 2ND RESPONDENT.** **EXHIBIT P1(I): THE TRUE PHOTOCOPY OF THE 10 THE PETITIONER'S C CLASS REGISTRTION CARD R3.** - **EXHIBIT P1(J): THE TRUE PHOTOCOPY OF THE 11TH PETITIONER'S C CLASS REGISTRATION CARDE RENEWED UPTO 31ST MARCH 2013 BY R3.** **EXHIBIT P1(JA): THE TRUE PHOTOCOPY OF THE 10TH PETITIONER'S AND A CLASS REGISTRATION RENEWED UPTO 31.3.2015 BY THE 2ND RESPONDENT.** **EXHIBIT P2: THE TRUE PHOTOCOPY OF THE WORK ORDER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OFLEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13 ISSUED BY R3 TO THE IST PETITIONER.** ## **PJ** **...2/-** **..2..** ## **WP(C).No. 8756 of 2014 (T)** ## **-------------------------------------** **EXHIBIT P2(A): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 2ND PETITIONER DATED 28.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13. EXHIBIT P2(B): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 3RD PETITIONER DATED 16.1.2012 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13.** **EXHIBIT P2(C): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 4TH PETITIONER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13.** **EXHIBIT P2(D): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 5TH PETITIONER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13.** **EXHIBIT P2(E): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 6TH PETITIONER DATED 20.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13. EXHIBIT P2(F): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 7TH PETITIONER DATED 19.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13.** **EXHIBIT P2(G): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 8TH PETITIONER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13. EXHIBIT P2(H): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 9TH PETITIONER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13.** **EXHIBIT P2(I): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 10TH PETITIONER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13. EXHIBIT P2(J): THE TRUE PHOTOCOPY OF THE WORK ORDER ISSUED BY R3 TO 11THPETITIONER DATED 27.2.2013 FOR THE MAINTENANCE WORK FOR RECTIFICATION OF LEAKAGES OF PIPE LINE FOR ONE YEAR 2012-13.** **EXHIBIT P3: THE TRUE PHOTOCOPY OF THE ELECTRONIC TENDER NOTICE DATD 11.2.2014 EXHIBIT P3: THE TRUE PHOTOCOPY OF THE ELECTRONIC TENDER NOTICE DATED 11.2.2014 ISSUED BY THE 3RD RESPONDENT FOR THE YEAR 2013-2014 UNDER THE NEYYATTINKARA DIVISION IN RESPECT OF TENDER NOS.88/13-14 TO 115/13-14, FOR THE VARIOUS MAINTENANCE WORKS FOR ONE YEAR 2014-15.** **EXHIBIT P3(A) THE TRUE PHOTOCOPY OF THE NOTE PREPARED BY THE IST PETITIONER ON 3.3.2014 REGARDING THE DETAILS OF RC TENDERS AND THE QUOTED RATES READ OUT BY R4** **...3/-** **PJ** **..3..** **WP(C).No. 8756 of 2014 (T) -------------------------------------** **EXHIBIT P4: THE TRUE PHOTOCOPY OF THE APPLICATION DATED 12.3.2014 OF 5TH PETITIONER BEFORE THE PUBLIC INFORKMATION OFFICER, KERALA WATER SUPPLY DIVISION, NEYYATTINKARA.** - **EXHIBIT P5: THE TRUE PHOTOCOPY OF THE PROCEEDINGS DATED 11.3.2014 OF HE 3RD RESPONDENT CANCELLING THE ELECTRONIC TENDER NOS.88/13-14 TO 113/13-14 OPENED ON 3.3.2014 AND ECIDING TO INVITE RETENDERS.** - **EXHIBIT P6: THE TRUE PHOTOCOPY OF THE SELECTION NOTICE NO.SD/DB3/S/1712/2013-14 DATED 13.2.2014 ISSUED BY THE 5TH RESPONDENT TO ONE MR.P.VIJAYAN NAIR.** - **EXHIBIT P7: THE PHOTOGRAPH OF THE FLEX BOARD ERECTED IN THE PREMISES OF THE 3RD RESPONDENT'S OFFICE ON 14.3.2014.** - **EXHIBIT P8: THE TRUE COPY OF THE ADDENDUM PUBLISHED BY THE 3RD RESPONDENT IN RESPECT OF TENDER NOS.114/13-14 AND 115/13-14 DATED 20/2/14** **EXHIBIT P9: THE TRUE COPY OF THE RELEVANT PAGE OF E PAPER OF TIMES OF INDIA DATED 4/5/14** - **EXHIBIT P10: THE TRUE COPY OF RELEVANT PAGE OF E PAPER OF TIMES OF INDIA DATE 23/5/13** - **EXHIBIT P10(A): THE TRUE COPY OF THE RELEVANT PAGE OF E PAPER OF MATHRUBHUMI DAILY DATED 23/5/14** - **EXHIBIT P10(B): THE TRUE COPY OF THE ENLARGED VIEW OF THE RELEVANT PAGE OF E PAPER OF MATHRUBHUMI DAILY DATED 23/5/14.** - **EXHIBIT P11: THE TRUE COPY OF COVERING LETTER DATED 9/4/14 ISSUED BY INFORMATION OFFICER** - **EXHIBIT P12: THE TRUE COPY OF LETTER ISSUED BY 3RD RESPONDENT DATED 11/2/14** - **EXHIBIT P12(A): THE TRUE COPY OF THE ELECTRONIC TENDER NOTICE IN MALAYALAM DATED 11//2/14** - **EXHIBIT P13: THE TRUE COPY OF ORDER DATED 12/3/14 BY THE 1ST RESPONDENT** - **EXHIBIT P14: THE TRUE COPY OF RELEVANT PAGE OF TENDER OPENING REGISTER IN RESPECT OF TENDER NO.103/13-14** - **EXHIBIT P14(A): THE TRUE COPY OF RELEVANT PAGE OF TENDER OPENING REGISTER IN RESPECT OF TENDER NO.112/13-14** - **EXHIBIT P14(B): THE TRUE COPY OF RELEVANT PAGE OF TENDER OPENING REGISTER IN RSPECT OF TENDER NO.114/13-14** **PJ** **...4/-** **..4..** **WP(C).No. 8756 of 2014 (T)** **-------------------------------------** ## **RESPONDENT(S)' EXHIBITS** **---------------------------------------** **EXHIBIT R1(A): TRUE COPY OF COMPARATIVE TENDERS SUBMITTED FOR THE WORKS SHOWING RATES FOR 2012-13 AND 2013-14.** **/ TRUE COPY /** **P.S. TO JUDGE** **PJ** A.M. Shaffique, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-=-= W.P(C) No. 8756 of 2014 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= Dated this, the 9[th] day of July, 2014. ## J U D G M E N T Petitioners, who are registered contractors of Kerala Water Authority (KWA), challenges Ext. P5 decision taken by the 3[rd] respondent to cancel the tender invited in terms of Ext.P3 Notice Inviting Tender (NIT) for the work relating to maintenance of pipelines for the year 2014-2015. 2. By Ext.P3 tenders were invited by means of electronic tenders, which inter alia contained a clause that while submitting tenders by e-tender, the tenderers were permitted to send the tender documents through speed post/registered post or submit the same directly in the tender box of the Division Office. All the petitioners submitted their tenders, and their rates were lowest in respect separate works. Under normal course, the work ought to have been awarded to them. However, the said tender had been cancelled alleging “technical reasons.” This, according to the petitioners, is arbitrary and illegal. 3. It is contended that the petitioners have about 10 to 20 years experience in carrying out the running contract works on maintenance for rectification of leakages of pipelines in various areas under the Neyyattinkara Division. Most of them were awarded work for 2013-2014 as well. They have also successfully completed the works entrusted W.P(C) No. 8756 of 2014 -: 2 :- to them. 4. After opening the tenders submitted on 3.3.2014 at 3.00 p.m., the 3[rd] respondent had informed all the persons regarding the quoted rates. Since the unsuccessful tenderers were aware of the quoted rates of each work, another re-tender will affect the interest of the petitioners is the prejudice alleged. It is therefore contended that the decision to cancel and retender the works will lead to loss of transparency. The petitioners are also alleging bias against the respondents and it is contended that while taking a decision to cancel the tender, they have not acted fairly, which is expected of a public authority. The petitioners rely upon Ext. P7, a flex Board, which was erected in the premises of KWA, Neyyattinkara Office on 14.3.2014. According to the petitioners, respondents 1 and 3 have acted in accordance with the demand of those contractors, who were ousted from running contract works in the Neyyattinkara Division as they have quoted rates higher than that of the lowest bidders. 5. Statement is filed by he standing counsel for respondents 1 to 5 and counter affidavit is filed by the 3[rd] respondent as well. In the statement filed, it is W.P(C) No. 8756 of 2014 -: 3 :- contended that tenders were invited for 26 works coming under the Neyyattinkara Division on running contract basis by e-tender. As it was for the first time that e-tender system was introduced, the tenderers were also permitted to submit tenders by registered post/speed post or by depositing the same in the box kept in the division. They received only 28 tenders and on opening the same, it was found that higher rates were quoted by the tenderers when compared to the previous years. It was realised that there was a cartel formation and therefore a decision was taken by the Managing Director to cancel the tender and to go for re-tender. It is pointed out that only two contractors had submitted tenders quoting the same pattern of rates for the works, which was exorbitant and was suggestive of concerted move to avoid competitors and to escalate the contract amount. Ext. R1(a) is the comparative tenders submitted for the works showing rates for 2012-2013 and 2013-2014. 4. In the counter affidavit filed, it was indicated that it was by mistake that tenderers were permitted to deposit the tender documents in the box kept in the office. This was apparently against the Board's decision and the procedure under the electronic tender W.P(C) No. 8756 of 2014 -: 4 :- system, which happened due to the inexperience in introducing the system for the first time. It is inter alia stated that the object of e-tendering system could not be achieved by adopting such a method. Only 6 contractors submitted e-tender and others deposited tenders in the tender box. According to them, there was a mutual understanding as the rates quoted by the participants would show that one among the tenderers will get one item of work while the other will get another work. This pattern was evident from the tenders received and therefore a decision was taken to cancel the tender. 5. Learned counsel for the petitioners would contend that despite all the tender process, the rates are always reduced by insisting contractors to carry out the work at 5% above the estimate for the works. This is the usual procedure that is being adopted by KWA. That apart, reliance is placed on the judgment of the Supreme Court in **Tata Cellular v. Union of India, [(1994) 6 SCC 651]** and **Ramana Dayaram Shetty v. International Airport Authority of India, [(1979) 3 SCC 489]** to contend that the decision making process was absolutely arbitrary, illegal and W.P(C) No. 8756 of 2014 -: 5 :- unfair and the intention of the KWA was to avoid the work to be awarded to the petitioners who are regular contractors and to bring in persons whose rates were much higher than what have been quoted by the petitioners. Now that the rates are known, on retender process, the other contractors will get a better opportunity to quote rates to avoid the petitioners from the bargain. 6. On the other hand, it was argued by the learned standing counsel for the KWA that tender had to be cancelled when it was known that there was system of cartel formation and each of the petitioners have quoted for two items of work covering 26 works and one among them quoted higher rate than the other, as a result which all the petitioners became lowest in one item each. This clearly proved collusion at the time of submission of tenders. 7. It is not in dispute that the KWA had invited tenders by e-tender system as well as by depositing the tender documents before the respondent authorities. But, in this case, tender has been cancelled on the ground that the respondent authority felt about a cartel formation. This is explained by them in paragraphs 4, 5 and 6 of their counter affidavit. It was also indicated W.P(C) No. 8756 of 2014 -: 6 :- that there occurred an error at page 29 of the notice inviting tenders in respect of Clause 4.23. The NIT condition requiring experience of the bidders was also missed by oversight, which vitiated the whole process. It is inter alia contended that in majority of the cases, only two contractors had participated and the amount quoted was very high. That situation indicates an internal arrangement among the contractors for quoting higher rates so as to get intending work in their favour. It is also stated that tender issuing authority has the right to cancel the tender without assigning any reason at any time. 8. The law in this regard is well settled. In **Tata Cellular** (supra), it is held that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favouritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government being the guardian of the finances of the State is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government, with the only W.P(C) No. 8756 of 2014 -: 7 :- limitation that the principles laid down in Article 14 of the Constitution have to be kept in mind while accepting or refusing a tender. It is also held that there can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation and that the right to choose cannot be considered to be an arbitrary power. It needs to be verified whether such a power is exercised for any collateral purpose, in which event, the exercise of that power will be struck down. 9. In **Ramana Dayaram Shetty** (supra) Supreme Court held at paragraph 13 as under: “The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities. If Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through the instrumentality or agency of corporations should equally be subject to the same limitations.” 10. The short question therefore to be considered is whether the decision taken by the respondent authority in cancelling the tender was in any way arbitrary, actuated by bias or for any collateral purpose. W.P(C) No. 8756 of 2014 -: 8 :- 11. As far as the contract conditions are concerned, it is open for respondents to cancel the contract without assigning any reason. Arbitrariness cannot be presumed as the respondent authority had explained in detail their doubt about the collusion between tenderers. That apart, being a commercial contract, when they form an opinion that the rates quoted are very high and it is demonstrated, such an issue cannot be adjudicated by this Court in a writ petition and it is always open for them to proceed for re-tendering. 12. Petitioners, however, rely upon Ext. P7, a flex board, which acclaims the Managing Director of KWA as a person who has solved certain problems of contractors in the Neyyattinkara Division. The contents of the flex board, by itself, will not prove any particular fact. Probably, the unsuccessful contractors are behind the publication of the flex board, Ext. P7. But, that does not, by itself, mean that the respondent authority has taken an arbitrary decision in the matter. The reasons for re-tendering appear to be justifiable and such a decision cannot be characterised as unjust or unfair in any manner. It may be true that the petitioners are contractors who have been doing the W.P(C) No. 8756 of 2014 -: 9 :- works in the Neyyattinkara Division for quite a long time. But the fact remains that the work is awarded by a tender process and if it is felt that the rates quoted are high, they are entitled to proceed for re-tendering the work or for negotiation. This is expected of an establishment which deals with public funds and involved in public utility services, which cannot be termed as either arbitrary or unfair in any manner. Under these circumstances, I do not think that the facts involved in this case justifies interference with the decision making process of the respondent authority. Hence, the writ petition fails and the same is accordingly dismissed. Sd/- A.M. Shaffique, Judge. Tds/