Simplex Infrastructures Ltd v. State of Kerala & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **FRIDAY, THE 07TH DAY OF SEPTEMBER 2018 / 16TH BHADRA, 1940 WP(C).No. 11370 of 2017** ## **PETITIONER:** **SIMPLEX INFRASTRUCTURES LTD REP. BY ITS SENIOR VICE PRESIDENT AND POWER OF ATTORNEY HOLDER MR.J.S.RAGHAVAN, NEW NO.48 (OLD NO.21), CASA MAJOR ROAD, EGMORE, CHENNAI-600008. BY ADV. SRI. JACOB P.ALEX** ## **RESPONDENTS:** |**1**|**STATE OF KERALA**| |---|---| ||**REPRESENTED BY THE PRINCIPAL SECRETARY TO**| ||**GOVERNMENT, INDUSTRIES & IT DEPARTMENT,**| ||**GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-**| ||**695001.**| |**2**|**KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION**| ||**LTD.**| ||**REP. BY ITS MANAGING DIRECTOR, KESTON ROAD,**| ||**KOWDIAR, THIRUVANANTHAPURAM-695003.**| |**3**|**THE TECHNICAL AND EXPERT COMMITTEE**| ||**(CONSTITUTED AS PER JUDGMENT DATED 02-12-2016 IN**| ||**WPC 13058 OF 2016), REPRESENTED BY J.RAVEENDRAN,**| ||**CHIEF ENGINEER (BUILDINGS) PWD BUILDINGS, PUBLIC**| ||**OFFICE, MUSEUM P.O., THIRUVANANTHAPURAM-695033.**| ||**BY ADVS.**| ||**GOVERNMENT PLEADER B VINOD**| ||**ADV.SAJI VARHESE FOR R2**| ||**SRI.P.U.SHAILAJAN SC KERALA STATE TEXTILE**| ||**CORPORATION LTD**| **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26.6.2018, THE COURT ON 07.09.2018 DELIVERED THE FOLLOWING:** W.P.(C).No11370/17 2 ## **JUDGMENT** - 1.This writ petition is filed with the following prayers:- i)issue a writ in the nature of certiorari or any other writ, order or direction calling for the records leading to the issuance of Exhibit P12 and quash the same. ii)issue a writ in the nature of certiorari or any other writ order or direction calling for the records relating to the issuance of the revised E tender Exhibit P6 and quash the same. Iii) issue a writ in the nature of mandamus or any other writ order or direction commanding the 2[nd] respondent to proceed with the original tender dated 2.10.2015 from the stage of Exhibit P4 declaration of the petitioner as L1 so as to complete the process of tendering to enable the commencement of the project i.e.constuction of Innovation Cum Incubation Tower and allied works for the Life Sciences Park, Thonnakkal, Thiruvananthapuram forthwith.” - 2.Heard learned counsel for the petitioner, learned Government Pleader as well as the learned counsel appearing for the 2[nd] respondent. - 3.It is submitted by the learned counsel for the petitioner that the 2[nd] respondent had published Exhibit P1 'e' tender for the W.P.(C).No11370/17 3 construction of an Innovation Cum Incubation tower for the Life Sciences Park, Thonnakkal, Thiruvananthapuram with an estimated value of Rs.129,67,13,495/-. The petitioner submitted an e tender which was notified as the lowest bid by Exhibit P4. The 2[nd] respondent thereafter cancelled the bid citing administrative reasons and issued Exhibit P6 revised tender notification. These actions were challenged before this Court. By Exhibit P8 judgment, the cancellation of the tender was interdicted on a finding that the decision making process which led to the same was vitiated by arbitrariness, unreasonableness, impropriety and non-consideration of relevant aspects. The question whether the variations in works would come within the scope of protection afforded by clause 35 was directed to be considered afresh. The committee constituted was directed to examine the whole matter and give an expert and technical opinion as to whether the variations that have emerged in the works will come within the scope and ambit of Clause 35 of the terms and conditions of Exhibit P1 bid. The petitioner was also directed to be heard in the matter. However, the re-tender was not interdicted. It was W.P.(C).No11370/17 4 further directed that if the decision of the PIC was to proceed with the original tender, then the revised tender notice would stand automatically rescinded. It is stated that the 3[rd] respondent thereafter submitted Exhibit P12 report which was not in accordance with the directions in Exhibit P8 judgment. It was opined in the report that Clause 35 of the tender document itself is ambiguous and both the original tender and the revised tender were liable to be cancelled and a further tender was to be floated. The said report is under challenge in this writ petition. 4.A counter affidavit has been filed on behalf of the 2[nd] respondent. It is stated therein that consequent to Exhibit P8 judgment, the 3[rd] respondent committee was constituted and the entire aspects were examined, but the petitioner did not respond to the notice issued by the committee to attend a hearing. Thereafter, Exhibit P12 report was submitted. The 2[nd] respondent had decided to request KITCO or any other competent agency to scrutinise and confirm the estimates as per the re-tender before opening the financial bid. It is stated W.P.(C).No11370/17 5 that thereafter, the revised estimate was again examined by KITCO and the KITCO observed that there are errors and omissions in the revised tender also and the KITCO had therefore recommended to cancel re-tender issued on 2.3.2016 considering the fact that the revised CPWD schedule of rates came into existence w.e.f. 1.4.2017. It is stated in paragraphs 19 and 20 of the counter affidavit as follows:- “It is therefore prayed that KSIDC may be allowed to withdraw from the tender in view of the revision of the CPWD schedule of rates which is expected to reduce the cost estimates and the need for desizing the project due to constraints on funds availability since the KSIDC has modified the infrastructure development plans in the Park due to the prolonged delay in commencement of building construction. It is proposed to revise the project by avoiding construction of the bio-processing facility envisaged as part of it as also to reduce the size of the building by one floor. This will result in the reduction of the area of construction by about 43,111 sq.ft. The original proposal was to construct building with an area of about 3,30,000 sq.ft. In addition to the reduction in cost due to W.P.(C).No11370/17 6 reduction in built-up area, the avoidance of construction of bio-processing facility would also result in reduction in cost of by way of equipments & other facilities which are expected to cost of Rs.458 lakhs. It is also submitted that the PIC subject to the decision of this Court, decided to engage M/s.HLL Infra Tech Services Ltd (HITES) wholly owned subsidiary of M/s.HLL Lifecare Ltd. which is an accredited agency of the Government of Kerala) for reviewing the project in the context of reduction in Schedule of Rates (SOR) and the proposed de-sizing of the project. The concerned Government Orders regarding empanelment are produced as Exhibits R2(e) and R2(f). KSIDC is exploring possibility of engaging M/s.HITES as Project Management Consultant (PMC) in view of their inhouse capability and expertise in setting up biotech based R&D facilities. It may be noted that HLL Lifecare Ltd has established their R&D facilities in TICEL Biotech Park, Chennai and Akkulam, Thiruvananthapuram with their inhouse capability. Considering their vast experience and expertise in executing similar projects, it is proposed to engage M/s.HITES for reviewing the project parameters. It is therefore proposed to cancel the re-tender released on W.P.(C).No11370/17 7 02.03.2016 and review the project parameters due to aforesaid reasons. The minutes of the meeting of the PIC held on 14.6.2017 is produced as Exhibit R2(g).” 5.Learned counsel for the petitioner submits that the action of the respondents in cancelling the tender and issuing a retender had been interdicted by this Court in Exhibit P8 judgment. Specific guide-lines have been issued in Exhibit P8 for the consideration of the issue by the PIC. It is contended that the matter should have been considered as directed by this Court in Exhibit P8 and that Exhibit P12 report of the PIC was in violation of directions of Exhibit P8 judgment. It is stated that the present action in having cancelled the retender proceedings as well and seeking to issue a fresh tender notice as further revised is completely unsustainable. - 6.The learned counsel for the petitioner relies on the decisions of a Division Bench of this Court in **Musthafa P.A. v. Union of India and others** [2014 KHC 329] and of a learned single Judge of this Court in **West Cost Concrete Products and** W.P.(C).No11370/17 8 **others v. The Kerala Water Authority and others** [2007 (1) KHC 753] to contend that after floating a tender the cancellation thereof and re-tendering are matters which are open to judicial review. 7.The learned counsel 2[nd] respondent would, on the other hand, contend that there were serious errors in the details provided both in Exhibit P1 tender document as well as in the re-tender as floated by the 2[nd] respondent. It is stated that what is involved is public money and that the proceeding with the tender would result in serious discrepancies and would lead to loss of public fund. It is submitted that the expert agency, which was entrusted with the matter, had found that there were serious discrepancies in the second tender as well. Further more, it is clearly stated in the counter affidavit that due to scarcity of funds with the Government the project is being de-sized and revised plan and estimate is necessary and therefore further fresh tender may be permitted to be issued in the matter. W.P.(C).No11370/17 9 8.I have considered the contentions advanced. It is not in dispute that Exhibit P8 had specifically directed the consideration of the issue with clear guidelines as to the nature and ambit of such consideration. However, it is now submitted that the very proposal for the project has undergone a revision and only a smaller construction is being proposed to be carried out. In such a situation, the direction by this Court to proceed further either with Exhibit P1 tender or Exhibit P6 revised re-tender would ultimately lead to unplanned expenditure and loss of public funds. 9.In the above view of the matter, I am of the opinion that in case there is a decision taken by the Government in the realm of policy that the project need not be carried out in the scale at which it was first envisaged, it would not be proper for this Court to insist that the 2[nd] respondent should proceed with Exhibit P1 tender or even with Exhibit P6 re-tender proceedings. It would well be open to the respondents to issue a tender after finalizing the scope of the project and all the attendant details which are required to be part of the 10 W.P.(C).No11370/17 tender. It is recorded that the action of the 2[nd] respondent in having issued tender and re-tender without properly verifying the requirements and details is clearly a despicable practice. However, this Court is of the opinion that the State and its machinery cannot be interdicted from reducing the financial scope of a project on grounds that are in the realm of financial viability and policy. In such a situation, I am of the opinion that the 2[nd] respondent is to be permitted to redefine the scope of the work which would necessitate fresh tender notice to be issued with respect of the work in question. The prayers in this writ petition therefore have to fail. The writ petition is accordingly dismissed. Sd/- **Anu Sivaraman, Judge** sj W.P.(C).No11370/17 11 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1** **TRUE COPY OF THE E-TENDER DATED 02-102015.** **EXHIBIT P2 TRUE COPY OF THE TENDER DETAILS.** **EXHIBIT P3 TRUE COPY OF THE LETTER DATED 04-122015 TOGETHER WITH TECHNICAL EVALUATION.** **EXHIBIT P4 TRUE COPY OF THE RESULTS OF THE FINANCIAL BID OPENINIG DATED 04-12-2015.** - **EXHIBIT P5 TRUE COPY OF E-MAIL DATED 02-03-2016 FROM THE 2ND RESPONDENT INTIMATING THE CANCELLATION OF THE TENDER.** - **EXHIBIT P6 TRUE COPY OF REVISED E-TENDER DATED 0303-2016.** **EXHIBIT P7 TRUE COPY OF THE MEMORANDUM OF WRIT PETITION (WITHOUT EXHIBITS) FILED IN WPC NO.13058 OF 2016.** **EXHIBIT P8 TRUE COPY OF JUDGMENT DATED 02-12-2016 IN WPC NO.13058 OF 2016.** - **EXHIBIT P9 TRUE COPY OF E-MAIL DATED 14-10-2015 FROM THE PETITIONER TO THE 2ND RESPONDENT ATTACHING THE PRE-BID QUERIES.** **EXHIBIT P10 TRUE COPY OF MINUTES OF THE PRE-BID MEETING DATED 16-10-2015.** - **EXHIBIT P11 TRUE COPY OF LETTER DATED 17-02-2016 FROM KITCO LTD TO THE 2ND RESPONDENT.** **EXHIBIT P12 TRUE COPY OF THE REPORT OF 3RD RESPONDENT TECHNICAL COMMITTEE DATED 23-02-2017.** W.P.(C).No11370/17 12 **EXHIBIT P13 TRUE COPY OF THE CVC GUIDELINES VIA CIRCULAR DATED 03-03-2007.** **EXHIBIT P14 TRUE COPY OF THE CVC GUIDELINES VIA CIRCULAR DATED 20-01-2010.** **EXHIBIT P15 TRUE COPY OF THE CVC GUIDELINES VIA CIRCULAR DATED 29-04-2014.** ## **RESPONDENT'S EXHIBITS:** **EXHIBIT R2 A TRUE COPY OF THE MINUTES OF THE MEETING DATED 4.4.2017.** - **EXHIBIT R2 B TRUE COPY OF THE MINUTES OF THE MEETING DATED 12.4.2017.** - **EXHIBIT R2 C TRUE COPY OF THE SUMMARY OF CHANGES IN QUANTITY AND RATES BETWEEN THE OLD TENDER AND NEW TENDER.** - **EXHIBIT R2 D TRUE COPY OF THE LETTER FROM KITCO LTD DATED 24.5.2017 RECEIVED BY THE 2ND RESPONDENT.** - **EXHIBIT R2 E TRUE COPY OF THE G.O.(P)NO.311/14/FIN DATED 3.7.2014.** - **EXHIBIT R2 F TRUE COPY OF THE G.O.(P)NO.339/2015/FIN. DATED 7.8.2015.** - **EXHIBIT R2 G TRUE COPY OF THE MINUTES OF THE MEETING OF THE PIC HELD ON 14.6.2017.** ## **TRUE COPY** **PS TO JUDGE**