V.C. SREEKUMAR v. KERALA WATER AUTHORITY and Executive Engineer, PH Division, Alappuzha District

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **TUESDAY, THE 4TH DAY OF APRIL 2017/14TH CHAITHRA, 1939** **WP(C).No. 4979 of 2017 (V) --------------------------** **PETITIONER:** **-----------** **V.C.SREEKUMAR, CONTRACTOR, SARASWATHI NIVAS, NORTH ARYAD P.O., ALAPPUZHA.** ## **BY ADV. SRI.MATHEW KURIAKOSE** **RESPONDENTS:** **------------** **1. KERALA WATER AUTHORITY, JALA BHAVAN, VELLAYAMBALAM, THIRUVANANTHAPURAM - 695001, REPRESENTED BY MANAGING DIRECTOR.** **2. EXECUTIVE ENGINEER, KERALA WATER AUTHORITY, P.H. DIVISION, ALAPPUZHA DISTRICT-688007.** **BY SRI.MILLU DANDAPANI, SC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-03-2017, THE COURT ON 04-04-2017 DELIVERED THE FOLLOWING:** **mbr/** ## **WP(C).No. 4979 of 2017 (V) ---------------------------** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** |**EXHIBIT P1:**|<br>**TRUE COPY OF THE EXTRACT OF E-TENDER**| |---|---| ||**DATED 22.1.2017 FOR THE WORK OF 29 RWSSRWSS TO**| ||**CHERUTHANA OF THE 2ND RESPONDENT.**| |**EXHIBIT P2:**|<br>**TRUE COPY OF THE BID SUBMISSION CONFIRMATION**| ||**WITH PRICE SCHEDULE.**| |**EXHIBIT P3:**|<br>**TRUE COPY OF THE REPRESENTATION DATED 3.2.2017**| ||**SUBMITTED BY THE PETITIONER TO THE**| ||**SUPERINTENDING ENGINEER, KERALA WATER AUTHORITY,**| ||**PH CIRCLE, ALAPPUZHA.**| |**EXHIBIT P4:**|<br>**TRUE COPY OF THE REPRESENTATION DATED 4.2.2017**| ||**SUBMITTED BY THE PETITIONER TO THE CHIEF**| ||**ENGINEER, KERALA WATER AUTHORITY, KOCHI.**| |**EXHIBIT P5:**|<br>**TRUE COPY OF THE ORDER NO.A4-4286/16-17(C)**| ||**DATED 7.2.2017 OF THE 2ND RESPONDENT.**| |**RESPONDENTS' **|**EXHIBITS**<br>**:**| |**EXHIBIT R2A:**|**TRUE COPY OF THE GO(P)NO.19/2016/FIN**| ||**DATED 3.2.2016.**| |**EXHIBIT R2B:**|**TRUE COPY OF THE GO(P)NO.124/2016/FIN**| ||**DATED 29.8.2016.**| |**EXHIBIT R2C:**|**TRUE COPY OF THE RELEVANT PAGES OF THE E-TENDER**| ||**DOCUMENT.**| |**EXHIBIT R2D:**|**TRUE COPY OF THE CORRIGENDUM NOTICE**| ||**DATED 20.1.2017.**| ||**//TRUE COPY//**| ||**P.S. TO JUDGE**| |**mbr/**|| ## **SHAJI P. CHALY, J.** ## **--------------------------------------W.P.(C). NO. 4979 OF 2017** **----------------------------------------** Dated this the 04[th] day of April, 2017 ## **JUDGMENT** This writ petition is filed by the petitioner seeking to quash Ext.P5 order passed by the second respondent dated 07.02.2017 whereby the bid submitted by the petitioner in respect of a tender invited by the second respondent was rejected and for other related reliefs. Material facts for the disposal of the writ petition are as follows:- Petitioner is an A class contractor at Alappuzha. In response to Ext.P1 notification of inviting e-tender for the work of 29RW SSR WSS to Cheruthana, drilling of a new tube well and its energisation and interconnection work of pumping main, petitioner submitted tender remitting requisite fee and EMD, evident from Ext.P2 confirmation. According to the petitioner, his tender turns out to be the lowest of the tenders, but the second respondent vide Ext. P5 order rejected his application for the reason that the rate W.P.(C). NO. 4979 OF 2017 2 quoted by the petitioner is having 18% difference as per the Government Orders referred to in Ext.P5 from the second lowest tenderer. According to th petitioner, the tender work is intended to be given to one Sekhar, who is none other than son-in-law of one P.R. Selvan, on extraneous consideration. There were also previous instances where the second respondent awarded tenders to said Selvan. Therefore, petitioner challenges Ext. P5. 2. Respondents 1 and 2 filed a joint counter affidavit stating that there is no quarrel or dispute about the rate quoted by the petitioner which is only Rs. 1,78,066.4800/against the Probable Amount of Contract (PAC) of Rs. 3,12,400.8481/-. Petitioner's tender application was considered. However based on the tender notification same was rejected on account of difference of 18% between the second lowest and first lowest quoted rates as per Ext. R2 (a) notification dated 03.02.2016 and Ext. R2(b) notification dated 29.08.2016. It is also submitted that the said aspect W.P.(C). NO. 4979 OF 2017 3 was indicated and enumerated as tender condition in the tender notification, evident from Ext.R2(c). As part of the tender condition, Clause 4.5 enumerated Performance Guarantee which read thus:- " The contractor who quotes very low rates will have to remit performance guarantee with a view to curb the tendency to quote low rates and execute the works unsatisfactorily. Additional performance guarantee will be insisted if the amount quoted is between 11% to 25% below estimate rate and no tender shall be accepted below this limit to ensure reasonable quality of work. Additional performance guarantee will be required in all cases where quoted rate falls below 10% of estimate cost but the maximum permissible lower limits is 25% below the estimated cost. The 10% standard exemption will be applicable to all estimate quoted below estimate cost up to 25%. If the rate quoted by the contractor is "x%' below estimate cost (Where x lies above 10% and up to 25%) the performance guarantee for an amount equal to (x-10)% of the estimate amount shall be obtained from the contractor." 3. However in pursuance to Ext.R2(b) Clause 4.5 of the tender document was modified and corrigendum notice W.P.(C). NO. 4979 OF 2017 4 was issued on 20.01.2017 which was also published in the website, evident from Ext.R2(d). As per the tender notification due date for submission of tender was on 22.01.2017 at 2.P.M., which the petitioner has not disputed. Even though the same was put in black and white, petitioner still participated and quoted less than 25% of the PAC i.e., 43% below the PAC and hence based on Exts. R2 (b) and R2(d) his tender application was rejected. 4. That apart it is contented that as per Ext. R2(b) Government Order there is no stipulation to provide a personal hearing to the participants. Other personal allegations made against the second respondent in respect of his acquaintance with one P.R. Selvan and Sekhar are all denied. Reasons are also assigned in the matter of award of various contracts to the said person and submits that the same is done in accordance with law. 5. Coming back to the facts of this case, it is submitted that the bid was opened on 25.01.2017 and it was W.P.(C). NO. 4979 OF 2017 5 aware to the petitioner. However, petitioner preferred representations, evident from Exts. P3 and P4. The second respondent has rejected the tender submitted by the petitioner in accordance with the stipulations and parameters contained under Exts. R2(a) to R2(b) and the same was intimated to the petitioner as per Ext.P5. Prior to Exts.R2(a) and R2(b), the authorities used to award the work to the tenderers who have quoted upto 50% below the PAC. However, in pursuance to Exts.R2(a) and R2(b) such practice has been stopped and no work has been awarded overlooking the stipulations contained under Ext. R2(b). Therefore, according to the second respondent the rejection of tender of the petitioner is in accordance with law and no manner of interference is warranted in Ext. P5 order. 6. Heard learned counsel for the petitioner, learned Standing Counsel for the respondents and perused the documents on record and the pleadings put forth by the respective parties. W.P.(C). NO. 4979 OF 2017 6 7. As discussed above, bid submitted by the petitioner was rejected on the ground that petitioner has quoted 43% below the PAC which has a difference of 18% with the tender submitted by the second lowest tenderer. In order to ascertain the legality of the rejection in accordance with the reasons assigned thereunder a reference to Ext.R2 (b) would be worthwhile. Ext. R2(b) is a Government notification dated 29.08.2016 which has modified the Clause 2009.4 of revised PWD Manual. The stipulations thus brought forth are as follows:- - “i. The tender with lowest quoted rate less than 75% estimated PAC shall not be rejected if sufficient competition is ensured and the rate quoted by the second and third lowest bidder are also comparatively nearer to the lowest bidder. - ii. The tender inviting authority shall obtain a statement from the lowest bidder quoting rates below PAC regarding the reasonableness of the rate quoted to assess that whether the quoted rates are workable. iii. Assessment shall be made by Department also, as to whether the particular work has any rate W.P.(C). NO. 4979 OF 2017 7 advantage as compared to the rate as given in Price Software Viz. Reduction in cost bitumen, steel etc. - iv. If any contractor quotes less than 75% of the estimated PAC and variation with all other quoted rates are much higher, the Tender accepting Authority shall take appropriate decision based on merits. - v. The above guidelines will come into force with immediate effect.” On a reading of Clause (i), it is made clear that a tender with lowest quoted rate less than the estimated PAC shall not be rejected if sufficient competition is ensured and the rate quoted by the second and third lowest bidders are comparatively nearer to the lowest bidder. Pausing here for a moment the second and third lowest bidders in the instant case has quoted 25% below the PAC. Therefore, admittedly there is a difference of 18%. Therefore, now the question is whether the rejection made by the second respondent as per Ext. P5 order is valid or not. Clause (iv) of Ext.R2(b) quoted above will show that if any contractor quotes less W.P.(C). NO. 4979 OF 2017 8 than 75% of the estimated PAC and variation with all other quoted rates are much higher, the tender accepting authority shall take appropriate decision based on merits. 8. According to the tender evaluation authority, the rate quoted by the petitioner is much below the PAC and the amount quoted by the second and third lowest tenders by 18%. It was a personal satisfaction attained by the said authority by evaluating the tender of all the participants. Therefore, having found that there is a glaring difference of 18% from the second and third lowest bidders the authority was satisfied that the tender submitted by the petitioner need not be considered in view of the stipulations contained under Ext. R2(b). Such a satisfaction arrived at by the second respondent cannot be said to be illegal, arbitrary or unfair. 9. However, learned counsel for the petitioner has put forth the contention that as per Ext. R2(b), the tender inviting authority is duty bound to obtain a statement from W.P.(C). NO. 4979 OF 2017 9 the lowest bidder quoting rates below PAC regarding the reasonableness of the rate quoted, to assess as to whether the quoted rates are workable. Therefore, according to learned counsel for the petitioner, such a course is not adopted by the second respondent and therefore, the awarding of the tender itself is thoroughly bad and illegal. It is also the contention of the learned counsel for the petitioner that no opportunity of hearing was provided to the petitioner before passing Ext.P1 order. 10. It is pointed out by learned counsel for the respondents that there is no provision in the notice inviting tender to provide a personal hearing to the petitioner. This is not refuted by the counsel appearing for the petitioner. No a contrary pleading is made to the said contention advanced by the second respondent in the counter affidavit. It is well settled and apposite that the parties are liable by the terms and stipulations contained under the notice inviting bid and the stipulations contained in any other W.P.(C). NO. 4979 OF 2017 10 notification generally issued in respect of evaluating the tender submitted by the participants, and that the participants are not entitled to enjoy anything more than the stipulations contained in such notifications. Therefore, I do not find any reason to entertain such a contention put forth by learned counsel for the petitioner. Be that as it may, from the facts and circumstances narrated by the petitioner, as well as the statements made in the counter affidavit filed by the second respondent, the tender was opened and the petitioner knew the person to whom the tender was awarded, or rather knew who are likely to be considered for awarding the tender, however petitioner has not cared to make any of them parties to the litigation. That apart personal allegations are raised by the petitioner against the second respondent in person and also against one of the participants in the tender. None of those persons are personally made parties in the writ petition. Therefore, in my considered opinion the writ petition is also bad for W.P.(C). NO. 4979 OF 2017 11 want of necessary parties in the party array. 11. Taking into account the respective submissions made across the Bar and assimilating the situations discussed above, there are no convincing and established reasons before this Court to sustain the reliefs sought for by the petitioner in the writ petition. Writ petition fails and accordingly it is dismissed. **SHAJI P. CHALY JUDGE** DCS