Ramesh E v Tirur Municipality and Others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS`** ## **`TUESDAY, THE 7[TH] DAY OF NOVEMBER 2023 / 16TH KARTHIKA, 1945`** ## **`WP(C) NO. 17266 OF 2023`** ## **`PETITIONER:`** ``` RAMESH E AGED 44 YEARS S/O. RADHAKRISHNAN NAIR, PROPRIETOR, M/S. ERAN ASSOCIATES, 4/522, RENJU BUILDING, THIRUR, MALAPPAURAM - 676102, PIN - 676102 BY ADVS. K.JANARDHANA SHENOY PRIYA CAROL ARYA M.A. ANJU DILEEP ``` ## **`RESPONDENTS:`** ``` 1TIRUR MUNCIPALITY REPRESENTED BY THE SECRETARY THRIKKANDIYOOR P.O, MALAPPURAM, PIN - 676104 2THE SECRETARY TIRUR MUNICIPALITY, THRIKKANDIYOOR P.O, MALAPPURAM, PIN - 676104 3THE MUNICIPAL ENGINEER TIRUR MUNICIPALITY, THRIKKANDIYOOR P.O, MALAPPURAM, PIN - 676104 4ADDL.R4: HAMSA.V.P, AGED 57 YEARS, S/O. MOIDEEN KUTTY, VELUTHEDATHUPARAMBIL HOUSE, SOUTH ANNARA, THRIKANDIYOOR VILLAGE, ANNARA DESOM, TIRUR P.O., MALAPPURAM DISTRICT - 676 101. (IS IMPLEADED AS ADDL.R4 IN THIS WRIT PETITION AS PER ORDER DATED 18/10/2023 IN IA 2/2023.) BY ADV GEORGE MATHEW SC- SAYED MANSOOR BAFAKHY THANGAL ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) NO. 17266 OF 2023 ``` ``` 2 ``` ## BECHU KURIAN THOMAS, J. ----------------------------------------W.P.(C) No.17266 of 2023 ---------------------------------------Dated this the 7[th] day of November, 2023 ## JUDGMENT The annual maintenance contract for street lights at Tirur Municipality for the year 2022-23 was put up for public auction as per a notice inviting tenders dated 14-12-2022. The eligibility for bidders included various conditions stipulated in the standard bid document for e- tenders. Though none of the said clauses in the bid document regarded arrears to the Municipal Corporation as an ineligibility, the tender notice purported to have been published on 13-12-2022, contained a clause that a person who has fallen in arrears to the Municipality under any count shall be disqualified from the tender process. 2. Petitioner has been carrying on the annual maintenance contract for street lights of the respondent Municipality for the last several years and continuously from the year 2013. He participated in the tender process on 26-12-2022. When the bid was opened out of six tenderers two including the petitioner were found to be qualified. In the technical and the financial evaluation the petitioner and one ``` WP(C) NO. 17266 OF 2023 ``` ``` 3 ``` ‘Anas S., New Tech Associates’, were found to be suitable. The financial evaluation also revealed that he was qualified and that petitioner had quoted the lowest rate. 3. According to the petitioner though he was actually identified as the lowest bidder eligible to be awarded the contract and in fact, awarded the contract, subsequently, by Resolution dated 19-05-2023, the Municipal Council decided to reject the tender submitted by the petitioner, pointing out an alleged arrears due to the Municipality and decided to proceed for re-tender. Petitioner thus challenges the cancellation of the tender proceedings. 4. In the counter affidavit filed by the respondent, it is alleged that the petitioner was awarded the contract for various works under the Municipality and that since there was default in payment under other contracts, petitioner became disqualified from participating in the tender proceeding. It is also stated that the petitioner had preferred an appeal before the Municipal Council challenging the demand dated 15-10-2022, and the appeal was considered and by order dated 22-03-2023, it was decided to recommend to the State Government to grant remission of KIST due from the petitioner for the period 16-02-2019 till 31-10-2019. In the meantime, since the tender proceedings ``` WP(C) NO. 17266 OF 2023 ``` ``` 4 ``` in respect of the AMC for the street lights were not finalised, by resolution dated 17-01-2023, it was resolved to execute an agreement with the petitioner to continue the earlier AMC with him for a further period of one month and thereafter Ext.R1(e) agreement was executed. However, by a clerical mistake and a misunderstanding that the agreement so executed was in relation to the tender proceedings the name of the work in Ext.P7 was mistakenly shown as S.O.No.356/2022 AMC for street light at Tirur Municipality. Respondents pleaded that re-tender proceedings have been initiated since the petitioner was not eligible to participate in the tender. 5. I have heard Sri.K. Janardhana Shenoy, the learned counsel for the petitioner, Sri.Sayed Mansoor Bafakhy Thangal, the learned Standing Counsel for the Municipality as well as Sri. George Mathew, the learned counsel for the 4th respondent. 6. Sri.K.Janardhana Shenoy, the learned counsel for the petitioner contended that the tender proceedings ought to have resulted in the award of contract in favour of the petitioner and Ext.P7 was, in fact, the award wherein everything is in tune with the grant of award of contract to the petitioner. It was only the Resolution number and the ``` WP(C) NO. 17266 OF 2023 ``` ``` 5 ``` date that referred to an agreement to continue the AMC for one more month. He further submitted that even the amount allegedly due from the petitioner had not crystallized at the time of the tender proceedings, since the appeal before the Municipal Council was pending. It was further submitted that, if at all, the petitioner was found to be disqualified at the time of technical evaluation or at the time of financial evaluation they would have noted the same, and having not done so, they cannot now turn around and decline to award the contract to the petitioner even after becoming the lowest tenderer and found to be qualified. 7. Sri.Sayed Mansoor Bafakhy Thangal, the learned Standing Counsel on the other hand contended that Ext.R1(a) had specifically incorporated the condition that those in arrears to the Municipal Council will not be eligible and further from Clause 6.5.1 of the bid document, the right to accept or reject any bid at any time prior to the award of contract rest with the tender inviting authority and therefore since the contract has not been awarded, they are at liberty to do so. Relying upon the decision in _Maa Binda Express Carrier And Anr vs Northeast Frontier Railway (2014) 3 SCC 760_ , the learned counsel submitted that all participating bidders are entitled to fair, equal, and nondiscriminatory ``` WP(C) NO. 17266 OF 2023 ``` ``` 6 ``` treatment in the evaluation of the bids and that none have any right to demand that the contract should be awarded in their favour. 8. Sri. George Mathew, the learned counsel for the 4th respondent contended that due to the failure to award the contract the public is suffering and the maintenance of street lights is not being carried out due to the failure of the Municipality to award a contract or extend the agreement after 08-03-2023. 9. I have considered the rival contentions. 10. Though the petitioner contended that Ext.R1(a) was not the tender notice there is nothing to indicate that the AMC for street lights at Tirur Municipality under the annual plan 2022-23 was covered by any other tender notice. Therefore it has to be assumed that Ext.R1(a)covers the tender proceedings involved in the present dispute. There is certainly a clause in Ext.R1(a) that those who have fallen in arrears with the Municipality are disqualified from participating in the tender proceedings. 11. Despite the aforementioned clause of disqualification involved in Ext.R1(a) tender notice, the Municipality while evaluating the bid of the petitioner found him technically and financially qualified as evidenced by ``` WP(C) NO. 17266 OF 2023 ``` ``` 7 ``` Ext.P4, Ext.P5, and Ext.P6. Petitioner's bid was accepted without finding any disqualification, even in the bid opening summary. In the financial evaluation summary also, the remarks column contained that the work is awarded to the petitioner being the lowest quote though there is an absence of the resolution number. Obviously at the time when the evaluation was carried out, the contract cannot be awarded since it will have to be done by the Municipality in its meeting. 12. It is seen from Ext.P6 dated 26-12-2022, in the remarks column relating to the petitioner as follows: “ _Lowest rate and hence the work is awarded to the Contractor vide Resolution No./Order No.0 of Tirur Municipality”._ As far as the other qualified bidder is concerned, the remarks column is stated below: “ _Second Bidder and hence kept in abeyance till the execution of agreement of the First bidder”_ In Ext.P7, dated 22-02-2023, styled as “Award of Contract” it is mentioned that petitioner is awarded the work being the contractor having quoted the lowest rate vide Resolution No./Order No.1 dated 17-01-2023 of Tirur Municipality. ``` WP(C) NO. 17266 OF 2023 ``` ``` 8 ``` 13. Almost two months later on 22-02-2023, Ext.P7 which is mentioned as ‘award of contract’ referring to all the specifics of the tender invited as per Ext.R1(a) and even mentions that the contract work is awarded to the petitioner. However, there is a reference to the resolution dated 17-01-2023, which the respondents have produced as Ext.R1(c) which states that since petitioner's appeal against dues demanded from him has not been finalised, the existing AMC ought to be extended by a further period under an agreement. 14. In this context, it is apposite to mention that the petitioner is alleged to have been issued with a demand for payment of arrears due to the Municipality to the tune of about Rs.20 lakhs on 22-10-2022. Challenging the said demand, petition preferred an appeal which was pending consideration before the Municipal Council on the date of tender. Subsequently, on 23-02-2023 Municipal Council decided to accept the recommendation of the finance committee to reduce the KIST amount due from the petitioner for conducting the comfort station for the period 16-02-2019 to 31-02-2019 and to recommend to the Government to permit such relaxation. It was further ``` WP(C) NO. 17266 OF 2023 ``` ``` 9 ``` decided to appoint a Revenue Officer to calculate the amount due from the petitioner after adjusting the amounts payable by the Municipality to the petitioner and that due from the petitioner to the Municipality. It is thus evident that as on the date of the tender, the demand made by the Municipality against the petitioner was not crystallized and was pending in appeal further the appeal was actually allowed with relief granted to the petitioner which necessitated the quantification of the quantum due from the petitioner based upon various calculations including adjustment of the amount due to the petitioner from the Municipality. Thus even as in March 2023, there was no crystallized amount due from the petitioner. 15. If a disputed amount is treated as arrears due to the Municipality it can lead to an anomalous situation where a bidder could be subjected to arbitrary treatment. Unbridled discretion will be vested with employers of contracts to make demands and they will be able to pick and choose the tenderers to be qualified or disqualified. Such a process will not be fair. Therefore a tenderer who has been subjected to unfair treatment in the tender process will be entitled to question such a contract. ``` WP(C) NO. 17266 OF 2023 ``` ``` 10 ``` 16. Admittedly, the petitioner had quoted the lowest amongst the tenders. His expertise in maintenance work of the street lights is beyond doubt since he has been continuing the said work for the last 10 years and was even granted, according to the respondent itself to continue the existing agreement till finalisation of the contract is done. When the public is suffering due to the failure of the Municipality to take a decision regarding the award of the contract. Re-tender proceedings will only delay the award of contract further. Petitioner has undertaken that he will clear the dues to the Municipality if his challenge against the demand is rejected. 17. This Court is of the view that circumstances require intervention. Hence, the re-tender proceedings are arbitrary and illegal, and Ext.P8, Ext.P8(a) and Ext.P9 are quashed. Respondents 1 and 2 are directed to permit the petitioner to execute the agreement with the pursuant to Ext.P2, as expeditiously as possible, at any rate within a period of 30 days from the date of receipt of a copy of this judgment. Petitioner shall file the undertaking before the Municipality that if any amount is due as arrears from him, the same shall be paid without delay after the challenge against the demand is concluded. ``` WP(C) NO. 17266 OF 2023 ``` ``` 11 ``` The writ petition is allowed. BECHU KURIAN THOMAS JUDGE AJM ``` WP(C) NO. 17266 OF 2023 ``` ``` 12 ``` ## **`APPENDIX OF WP(C) 17266/2023`** ``` PETITIONER EXHIBITS Exhibit P1A TRUE COPY OF THE NOTICE INVITING TENDERS FOR THE AMC FOR STREET LIGHT AT THE 1ST RESPONDENT MUNICIPALITY PUBLISHED IN THE E TENDERING SYSTEM OF THE GOVERNMENT OF KERALA DATED 14-12- 2022 Exhibit P2A TRUE COPY OF RELEVANT EXTRACT OF THE STANDARD BID DOCUMENT FOR E- TENDERING (FOR WORKS COSTING BELOW RS. 5 CRORES) ISSUED BY THE 1ST RESPONDENT MUNICIPALITY FOR THE AMC FOR STREET LIGHTS AT TIRUR MUNICIPALITY UNDER ANNUAL PLAN 2022-23 Exhibit P3A TRUE COPY OF THE PRELIMINARY AGREEMENT EXECUTED BY THE PETITIONER DATED 22-12-2022 IN RS. 200/- WORTH STAMP PAPER Exhibit P4A TRUE COPY OF THE BID OPENING SUMMARY NO. A5-16752/21/OPEN DATED 26-12-2022 FOR THE WORK S0356 /22 AMC FOR STREET LIGHT AT TIRUR MUNICIPALITY UNDER ANNUAL PLAN 2022-23 AS UPLOADED BY THE RESPONDENTS IN THE E-TENDERING SYSTEM OF GOVERNMENT OF KERALA Exhibit P5A TRUE COPY OF TECHNICAL EVALUATION SUMMARY NO. A5- 16752/21/TECH. DATED 26-12- 2022.OF THE BIDS FOR THE AMC FOR STREET LIGHT AT TIRUR MUNICIPALITY UNDER ANNUAL PLAN 2022-23 AS UPLOADED BY THE RESPONDENTS IN THE E-TENDERING SYSTEM OF GOVERNMENT OF KERALA Exhibit P6A TRUE COPY OF FINANCIAL EVALUATION SUMMARY NO. A5- 16752/21/FIN. DATED 26-12-2022 OF THE BIDS FOR THE AMC FOR STREET LIGHT AT TIRUR MUNICIPALITY UNDER ANNUAL PLAN 2022-23 AS UPLOADED BY THE RESPONDENTS IN THE E- TENDERING SYSTEM OF GOVERNMENT OF ``` ``` WP(C) NO. 17266 OF 2023 ``` ``` 13 ``` ``` KERALA ``` ``` Exhibit P7A TRUE COPY OF THE AWARD OF CONTRACT NO. A5-16752/21/AOC DATED 22-02-2023 FOR THE AMC FOR STREET LIGHT AT TIRUR MUNICIPALITY UNDER ANNUAL PLAN 2022-23 AS UPLOADED BY THE RESPONDENTS IN THE E-TENDERING SYSTEM OF GOVERNMENT OF KERALA Exhibit P8A TRUE COPY OF THE RELEVANT EXTRACT OF THE NEWS APPEARED IN CHANDRIKA DAILY DATED 25-05-2023 Exhibit P9A TRUE COPY OF TENDER ID 2022_LSGD_539183_2 DATED 24-05- 2023 Exhibit R 1(b)true photostat copy of decision No.17 dated 23-02-2023 taken by the Municipal council Exhibit R 1 (c)true copy of decision No.1 of municipal council dated 17-01- 2023 Exhibit R 1 (d)true photostat copy of council decision No.28 dated 19-05-2023 Exhibit R 1(a)true photostat copy of tender notice dated 13-12-2022 issued by the 2nd respondent Exhibit P8(a)TRUE COPY OF THE DECISION TAKEN IN THE MUNICIPAL COUNCIL OF THE 1ST RESPONDENT MUNICIPALITY IN ITS MEETING DATED 19-5-2023 RESPONDENT EXHIBITS Exhibit R1(e)THE TRUE PHOTOSTAT COPY OF AGREEMENT DATED 09-02-2023 BEARING NO.80/22-23 ```