High Court of KeralaSingle Judge2022-08-16Writ petition allowed; Respondents directed to ...

Sakthi Traders v Kerala Books and Publication Society and Ors.

Case / Petition Number:W.P.(C) No.19825/2022

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: V.G. Arun
Judgment Date: 2022-08-16
Court Decision / Holding: The writ petition is allowed. The first respondent shall finalise the proceedings initiated as per Ext.P2 notification by awarding the work of the items for which petitioner is the highest bidder subject to the petitioner satisfying all requisite conditions.
Final Disposition: Writ petition allowed; Respondents directed to finalize tender awards in favor of petitioner for the relevant items.

Parties to the Case

Appellants / Petitioners

Sakthi Traders

Respondents

Kerala Books and Publication Society
Chairman and Managing Director, Kerala Books Publica tions Society

Legal Representation & Advocates

Counsels for Petitioners

• Jayasree K.P.
• John Joseph

Counsels for Respondents

• Smt. Latha Anand, SC

Case Synopsis & Summary

This writ petition challenges the tender process initiated by the Kerala Books and Publication Society (first respondent) for disposal of specified waste papers. Sakthi Traders, a partnership engaged in purchase and sale of paper scrap, claimed it was the highest bidder for two items in the e-tender Nos P2-3208/04/2022-2023/1385 (purchase and removal of torn and damaged reels) and P2-3208/03/2022-2023/1385 (purchase and removal of printed waste) for the period 1 April 2022 to 31 March 2023. The petitioner sought a direction to finalize and execute tender agreements in its favor and to refrain from awarding the contracts to others pending disposal of the petition. It argued that, per the contract terms, it was entitled to 10,000 kgs of torn/damaged reels and 35,000 kgs of printed waste monthly from the specified date, and that delays in awarding the contract had compelled it to enter into supply arrangements with mills, risking penalties and breach of commitments. The respondent society countered that the tender process was at a preliminary stage and bids were not evaluated; a government letter indicated KPPL’s involvement and a demand to supply waste paper to KPPL at the highest quoted price. The court observed that interference in contractual matters is limited but permissible in the public interest, and ultimately allowed the petition, directing finalization of the awards in Sakthi Traders’ favor, subject to compliance with conditions.

Provisions of Law Cited

Constitution of India, Article 226

Legal Doctrines & Maxims

Limited scope of interference in contractual matters under Article 226
Intervention in public interest in exceptional circumstances

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that under the terms of the contract it is entitled to receive monthly quantities of torn and damaged reels (10,000 kg) and printed waste (35,000 kg) from 1-4-2022 onward, based on the two e-tenders. Having participated in the process and paid earnest money, the petitioner suffered breach due to the government’s delay and the respondents’ decision to finalize the award in favour of another bidder for related items. The petitioner asserts discrimination and arbitrary exercise of power by delaying the award and not finalising the contract for the items where it was the highest bidder. It relies on tender terms, the highest bid, and the contractual commitments, contending that mere participation in a tender does not entitle a bidder to award, especially where the government has moved to supply to KPPL as per Ext.R1 communications. The petitioner seeks finalisation of the two contracts in its favor and an order not to award to others pending disposal of the petition, citing public interest and legitimate expectations.

Contentions of Respondents

The respondents contend that the tender process was still at a preliminary stage, with bids not yet evaluated and no award made. Following Ext.R1(a) from the Industries Department, the government indicated a need to supply white cuttings and office waste to KPPL, and a request to finalize the tender at the highest quoted rate for related items. They argue that mere participation in a tender process does not confer a right to award and that the first respondent may proceed with, or defer, the work in favor of KPPL. They emphasize the limited scope of judicial review under Article 226 in contractual matters and rely on Silppi Constructions Contractors v. UOI and Caretel Infotech Ltd. to justify maintaining the tender process pending final decisions. Governments’ circulars and KPPL’s involvement are cited to justify keeping the process in limbo until a public-interest-based decision is made.

Cited Precedents (5)

Case Name	Citation	Treatment	Explanation
Silppi Constructions Contractors v. Union of India (UOI) and Ors.	2020 16 SCC 489	Positive	Cited to illustrate the limited scope of judicial interference in contractual matters; supports intervention when public interest demands.
Caretel Infotech Ltd. v. Hindustan Petroleum Corporation Limited and Ors.	2019 14 SCC 81	Positive	Used to justify limited judicial review in contractual/public-interest contexts.
Harminder Singh Arora v. Union of India and Others	1986 3 SCC 247	Mentioned Only	Cited by petitioner; not central to the court’s decisive reasoning.
Kanhaiya Lal Agrawal v. Union of India and Others	2002 (6) SCC 315	Mentioned Only	Cited by petitioner; not the decisive basis for the ruling.
Association of Registration Plates Manufacturers of India v. Union of India	2003 (1) KLT 895	Mentioned Only	Cited in support of judicial intervention in contractual matters; not the central holding.

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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 V.G.ARUN** **TUESDAY, THE 16[TH] DAY OF AUGUST 2022 / 25TH SRAVANA, 1944** ## **WP(C) NO. 19825 OF 2022** ## **PETITIONER:** SAKTHI TRADERS, ERUVA P.O, KAYAMKUALM ALAPPUZHA-690564 REPRESENTED BY ITS MANAGING PARTNER D. GOPINATH, AGED 54, S/O DAMODARA PANICKER RESIDING AT KUNNUMMEL THEKKATHIL, ERUVA P.O KAYAMKULAM 690572, PIN - 690564 BY ADVS. JAYASREE K.P. JOHN JOSEPH ## **RESPONDENTS:** 1 KERALA BOOKS AND PUBLICATION SOCIETY KAKKANAD P.O, KOCHI -682030. REPRESENTED BY CHAIRMAN AND MANAGING DIRECTOR , PIN - 682030 2 THE CHAIRMAN AND MANAGING DIRECTOR KAKKANAD P.O, KOCHI -682030, PIN - 682030 BY ADV SMT.LATHA ANAND, SC, KERALA BOOKS PUBLICATIONS SOCIETY **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.07.2022, THE COURT ON 16/8/2022 DELIVERED THE FOLLOWING:** W.P.(C)No.19825/2022 2 ## **V.G.ARUN J.** ------------------------------------- **W.P.(C) No.19825 of 2022 ---------------------------------** Dated this the 16th day of August 2022 ## **JUDGMENT** The petitioner is a partnership firm doing business in purchase and sale of paper/scrap, its grading and segregation. The first respondent published Ext.P2 e-tender notice dated 14/3/2022 inviting tenders for the purchase and removal of specified items of waste paper from its unit for a period of one year from 1-4-2022 to 31/3/2023. The petitioner participated in the tender and was the highest bidder for two items, viz.purchase and removal of torn damaged reels and printed waste. The petitioner's grievance is regarding the first respondent's failure to award contract for which he is the lowest tenderer. The writ petition is hence filed seeking the following reliefs; (I) Finalise and execute tender agreements in respect of e- tender No.P2-3208/04/2022-2023/1385, for the purchase and removal of torn and damaged reels and the e-tender No.P2-3208/03/2022-2023/1385, for the purchase and removal of printed waste in favour of the petitioner and award the said works to the petitioner pending disposal of W.P.(C)No.19825/2022 3 the above writ petition. (ii). Not to award the contract in respect of e-tender No.P23208/04/2022-2023/1385 for the purchase and removal of torn and damaged reels and the contract in respect of e- tender No. P2-3208/03/2022 – 2023/1385, for the purchase and removal of printed waste in favour of any other person pending disposal of the above writ petition. 2. Learned counsel for the petitioner submitted that as per the terms of the contract, the petitioner is entitled to get a total quantity of 10,000 kgs of torn and damaged reels and 35000 kgs of printed waste every month from 1-4-2022 onwards. Expecting that the award of contract will be finalised without delay, the petitioner had entered into agreements with several paper mills, promising to supply torn and damaged reels and printed waste on a monthly basis. The petitioner has been disabled from honouring his part of the agreement due to the delay in awarding the contract. This has resulted in some of the paper mills initiating legal action against the petitioner. It is contended that, the first respondent has finalised the award of contract in favour of the highest bidder for the purchase and removal of paper cutting waste, based on the very same tender proceedings. Hence, the first respondent's refusal to finalise the award of contract in the petitioner's case amounts to W.P.(C)No.19825/2022 4 discrimination and arbitrary exercise of power. 3. Learned standing counsel for the first respondent society submitted that the tender process was only at a preliminary stage and the bids had not even been evaluated. It is pointed out that, immediately after the opening of the financial bids, the first respondent received Ext.R1(a) demi-official letter dated 12-4-2022 from the Principal Secretary, Industries Department. In the letter it was stated that the Government of Kerala had taken over the erstwhile Hindustan Newsprint Ltd(HNL) and formed a new company by name Kerala Paper Products Ltd(KPPL), which is slated to be commissioned in the month of the month of May 2022. As the price of paper pulp in the international market is exceedingly high, the new company has to source the white cuttings and office waste paper required the manufacturing of its produce from the domestic market. The Government therefore requested the first respondent to take necessary action for supplying white cuttings and office waste paper to KPPL. On their part, the KPPL also issued a letter to the first respondent requesting to provide cutting paper waste, torn and damaged paper reels, unusable cut bits, while folded forms and printed waste, at the highest price quoted in the tender conducted pursuant to Ext.P2 tender notification. Thereupon, the first respondent issued Ext.R1(c) communication to the Principal Secretary, 5 W.P.(C)No.19825/2022 Printing and Stationary, acknowledging receipt of Ext.R1(a). In the letter, it was pointed out that, permission for removing the paper cutting waste had been issued to the highest tenderer and the highest tenderer for other items is requesting finalise the tender without delay. The Standing Counsel contended that mere participation in a tender process will not confer the right to be awarded the work. As long as the tender is not awarded, the first respondent can decide to either go ahead with the tender process or to offer the work to the KPPL. The limited scope of interference in contractual matters, in exercise of the review power under Article 226, is highlighted with support of the decisions in the _**Silppi Constructions Contractors v. Union of India(UOI) and Ors. (2020) 16 SCC 489)**_ and _**Caretel Infotech Ltd. v. Hindustan Petroleum Corporation Limited and Ors(2019) 14 SCC 81).**_ 4. In reply, the counsel for the petitioner contended that, other than issuing Ext.R1(a) communication, requiring the first respondent to supply paper waste to the KPPL, the Government had not taken any further steps. The KPPL is yet to become functional and its requirements for paper waste will not arise in the near future. On the other hand, the petitioner had participated in the tender process after remitting huge amounts towards earnest money deposit and cost of tender form. Hence,there is no justification in not proceeding with the tender process W.P.(C)No.19825/2022 6 and awarding contract to the petitioner with respect to the works for which he had quoted the highest rate. Reliance is placed on the decisions in **Harminder Singh Arora v. Union of India and Others (** _**1986 3 SCC 247), Kanhaiya Lal Agrawal v. Union of India and Others [2002 (6) SCC 315]**_ and the decision of a learned Single Judge of this Court in A **ssociation of Registration Plates Manufaturers of India v. Union of India** [ _**2003 (1) KLT 895**_ ]to contend that, in appropriate cases, this Court can intervene even in contractual matters. 5. The following facts are not in dispute. In the tender conducted pursuant to Ext.P21, petitioner quoted the highest rate for two items. If not for Ext.R2(a) letter from the Government, the first respondent would have finalised the tender for those items in the petitioner's favour. In spite of Ext.R2(a) letter, the tender process has not been cancelled by the first respondent. 6. The legal question emerging from the admitted facts is whether the Government can keep the tender proceedings of a public authority in limbo, based on a future requirement of an industrial unit which is yet to be commissioned. In my opinion, the Government is not justified in requiring the first respondent to keep the tender proceedings on hold for an indefinite period, resulting in loss, not only to the highest tenderer but also to the first respondent. In that view of the matter, the 7 W.P.(C)No.19825/2022 Government's action is against public interest. Although, scope for interference in contractual matters is very limited, the writ courts are not expected to be mute spectators even after finding of power the action of the State to be unreasonable and arbitrary. The essence of the law laid down in the cited judgments is that while courts should exercise restraint and caution, if overwhelming public interest calls for intervention, the courts should not hesitate to do so. The instant case project not only the legitimate expectation of the petitioner, but also Governments' the intervention in the tender process, resulting in monetary loss to a public enterprise. Being so, this court is justified in exercising the power under Article 226. In the result, the writ petition is allowed. The first respondent shall finalise the proceedings initiated as per Ext.P2 notification by awarding the work of the items for which petitioner is the highest bidder subject to the petitioner satisfying all requisite conditions. Sd/- V.G.ARUN Judge dpk W.P.(C)No.19825/2022 8 ## **APPENDIX OF WP(C) 19825/2022** |PETITIONER EXHIBITS|| |---|---| |Exhibit P1|. A TRUE COPY OF THE PARTNERSHIP DEED DATED| ||11.08.2017 EXECUTED BETWEEN THE SAID GOPINATH| ||AND MAYA| |Exhibit P2|A TRUE COPY OF THE E-TENDER NOTICE NO P2-| ||3208/2022-2023/1385 DATED 14.03.2022| ||PUBLISHED BY THE RESPONDENTS INVITING TENDERS| ||FOR THE SALE AND REMOVAL OF WASTE| ||PAPERS/MATERIALS FOR A PERIOD OF ONE YEAR| ||FROM 01.04.2022 TO 31.03.2023| |Exhibit P3|A TRUE COPY OF THE FORM OF TENDER DATED| ||25.03.2022 SUBMITTED BY THE MANAGING PARTNER| ||ON BEHALF OF THE PETITIONER FIRM FOR THE| ||PURCHASE AND REMOVAL OF TORN DAMAGED REELS| |Exhibit P4|A TRUE COPY OF THE FORM OF TENDER DATED| ||25.03.2022 SUBMITTED BY THE MANAGING PARTNER| ||ON BEHALF OF THE PETITIONER FIRM FOR THE| ||PURCHASE AND REMOVAL OF PRINTED| |Exhibit P5|A TRUE COPY OF THE DOCUMENT SHOWING THE NAME| ||OF THE MANAGING PARTNER OF THE PETITIONER| ||FIRM AS THE HIGHEST BIDDER IN THE E-TENDER NO| ||P2-3208/04/2022-2023/1385 DATED 14.03.2022.| |Exhibit P6|A TRUE COPY OF THE DOCUMENT SHOWING THE NAME| ||OF THE MANAGING PARTNER OF THE PETITIONER| ||FIRM AS THE HIGHEST BIDDER IN THE E-TENDER| ||NO. P2-3208/03/2022-2023/1385 DATED| ||14.03.2022| |Exhibit P7|. A TRUE COPY OF THE REPRESENTATION DATED| ||10.05.2022 SUBMITTED BY THE PETITIONER BEFORE| ||THE 1ST RESPONDENT SOCIETY| |Exhibit P8|A TRUE COPY OF THE DOCUMENT SHOWING THE NAME| ||OF ONE GREEN WORM SOLUTIONS LLP AS THE| ||HIGHEST BIDDER IN THE TENDER SUBMITTED FOR| ||THE SALE OF PAPER CUTTING WASTE FOR THE YEAR| ||OF 2022-23| |Exhibit P9|. A TRUE COPY OF THE TAX INVOICE DATED| ||18.04.2022 ISSUED FROM THE OFFICE OF THE| ||RESPONDENTS PURSUANT TO THE FINAL EXECUTION| ||OF THE TENDER AGREEMENT IN FAVOUR OF GREEN| ||WORMS ECO SOLUTIONS LLP| |RESPONDENT EXHIBITS|| W.P.(C)No.19825/2022 9 |Exhibit R1(A)|TRUE COPY OF THE DEMO OFFICIAL LETTER NO.| |---|---| ||G1.72/2022/ID DATED 12/04/2022 ISSUED BY| ||INDUSTRIES, GENERAL EDUCATION AND REVENUE (F)| ||DEPARTMENT| |Exhibit R1(B)|TRUE COPY OF E-MAIL DATED 18/04/2022 SENT BY| ||M/S. KPPL| |Exhibit R1(C)|TRUE COPY OF THE LETTER DATED 15/06/2022 SENT| ||BY KBPS TO GOVERNMENT| |Exhibit R1(D)|TRUE COPY OF THE JUDGMENT DATED 07/04/2022 IN| ||W.P(C) 27487/2021|