WP(C) Nos. 16661 of 2013 & 20328 of 2013

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** ## **MONDAY, THE 30TH DAY OF SEPTEMBER 2013/8TH ASWINA, 1935** ## **WP(C).No. 16661 of 2013 (G)** ## **----------------------------** ## **PETITIONERS:** **--------------------------** ## **1. SIDCO SUPPLIERS ASSOCIATION** - **(REGN.NO.2084/04) REPRESENTED BY ITS GENERAL SECRETARY N.J.DANIEL, JEMO-TECH PLAZA, THANNUKKAL JN., ELAMAKKARA.P.O., COCHIN-682 026.** **2. BRIJESH.K.P, MANAGING PARTNER, SOLENERGIES 2/88, OPP. L.P.SCHOOL, KARAPARAMBU, CALICUT-673 010.** ## **3. K.SREEJITHLAL,** - **PUBLIC RELATIONS OFFICER, MICRO TECHNOLOGIES, NEAR STADIUM JUNCTION, PUTHIYARA ROAD, CALICUT-16.** **4. RASHY ELECTRONICS,REPRESENTED BY PROPRIETOR.M.SAKKEENA,AGED 37 YEARS, W/O.RASHEED.E.K, KARAD, P.O.FAROOK COLLEGE, MALAPPURAM DISTRICT.** **BY ADVS.SMT.AYSHA YOUSEFF SMT.MOLLY JACOB SMT.RABIA BEEGAM T.K. SRI.JOBI.A.THAMPI SMT.M.KABANI DINESH SMT.SITHARA SHAMSUDEEN** **RESPONDENTS:** **-------------------------------** ## **1. STATE OF KERALA,REPRESENTED BY ITS CHIEF SECRETARY GOVERNMENT OF KERALA, SECRETARIAT, TRIVANDRUM-695 001.** ## **2. STATE OF KERALA,** - **REPRESENTED BY ITS SECRETARY LOCAL SELF-GOVERNMENT DEPARTMENT, SECRETARIAT, TRIVANDRUM-695 001.** **3. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVT. OF KERALA, STORES PURCHASE DEPARTMENT, SECRETARIAT, TRIVANDRUM, PIN-695 001.** **2/-** **sts** **-2-** ## **WP(C)NO.16661/2013** **4. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVT. OF KERALA, INDUSTRIES DEPARTMENT, SECRETARIAT, TRIVANDRUM-695 001.** **5. KERALA STATE SMALL INDUSTRIES DEVELOPMENT CORPORATION LIMITED,REPRESENTED BY ITS MANAGING DIRECTOR, HOUSING BOARD BUILDING, TRIVANDRUM-695 001.** ## **6. KERALA RURAL EMPLOYMENT & WELFARE SOCIETY,** - **REPRESENTED BY ITS SECRETARY, CORPORATION JUBILEE BUILDING, NEAR OVER BRIDGE JUNCTION M.G.ROAD, TRIVANDRUM-695 001.** ## ***ADDL.R7 IMPLEADED** ***R7. PRADEEP.P.V.,AGED 39 YEARS, S/O.N.GANGADHARAN NAIR, SOLE PROPRIETOR, M/S.USHA ELECTRONICS SYSTEMS, THRITHALA ROAD, KOOTTANAD.P.O., PATTAMBI, PALAKKAD DISTRICT,PIN -679 533.** ***ADDL. R7 IS IMPLEADED AS PER ORDER DATED 18.07.2013 IN IA.NO. 9527/2013.** ## ****ADDL.R8 IMPLEADED** ****R8. M/S.EDISON ELECTRONICS,** **A REGISTERED PARTNERSHIP FIRM UNDER THE INDIAN PARTNERSHIP ACT, D.NO.VIII/520 C PARAPPILLIL ROAD, THIRUVANKULAM.P.O., ERNAKULAM -682 305 REPRESENTED BY ITS PARTNER SAJI VN, AGED 38 YEARS, S/O.LATE NARAYANAN KUTTY.** ****ADDL. R8 IS IMPLEADED AS PER ORDER DATED 29.08.2013 IN IA.NO. 11019/2013.** **R1 TO R4 BY GOVERNMENT PLEADER SRI. MANILAL** **R5 BY ADV. SRI.R.T.PRADEEP** **R6 BY SRI.S.SREEKUMAR,SENIOR ADVOCATE ADV. SRI.P.MARTIN JOSE SRI.P.PRIJITH ADDL.R7 BY ADV. SRI.P.T.DINESH ADDL.R8 BY ADV. SRI.SUNIL NAIR PALAKKAT SRI.K.N.ABHILASH SMT.R.LEELA SMT SHEEBA N.K SRI. K.K. ANIL KUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-09-2013,ALONG WITH WP(C) NO.20328 OF 2013, THE COURT ON 30-09-2013 DELIVERED THE FOLLOWING:** **sts** ## **WP(C).No. 16661 of 2013 (G)** ## **----------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** ## **-------------------------------------** **EXHIBIT-P1 TRUE COPY OF THE REGISTRATION CERTIFICATE ISSUED TO THE IST PETITIONER DTD.11.8.2004** - **EXHIBIT-P2 TRUE COPY OF THE PURCHASE ORDERS ISSUED TO MICRO TECHNOLOGY,CALICUT.** - **EXHIBIT-P3 TRUE COPY OF THE CIRCULAR NO.3038/83/08/SPD DTD.30.1.2009 ISSUED BY THE STORES PURCHASE (A)DEPARTMENT** - **EXHIBIT-P3(A) TRUE COPY OF THE G.O.P.259/2010/LSGD DATED 8/11/2010 AND THE GUIDELINES FOR PROCUREMENT OF GOODS AND SERVICES IN LOCAL SELF-GOVERNMENT INSTITUTIONS IN KERALA ADDED VIDE ORDER DATED 20/8/13 IN IA.NO.11203/13** - **EXHIBIT-P4 TRUE COPY OF THE ORDER ISSUED BY THE 2ND RESPONDENT (LOCAL SELF GOVERNMENT DEPARTMENT)** - **EXHIBIT-P5 TRUE COPY OF THE TENDER NOTICE DTD.13.6.2013 ISSUED BY 6TH RESPONDENT KERALA RURAL EMPLOYMENT & WELFARE SOCIETY** - **EXHIBIT-P5(A) TRUE COPY OF THE RELEVANT PORTION OF THE BYE LAW OF THE 6TH RESPONDENT SOCIETY** - **EXHIBIT-P6 TRUE COPY OF THE REPRESENTATION SUBMITTED BY THE IST PETITIONER TO THE GOVT. OF KERALA.** - **EXHIBIT-P7 TRUE COPY OF THE G.O(P) NO.3/2013 /SPD DATED 21/6/2013 AND RELAVANT PORTION OF STORES PURCHASE MANUEL.** ## **RESPONDENT(S)' EXHIBITS: ------------------------------------------** **EXHIBIT R6(A) TRUE COPY OF THE G.O.(P) 259/2010/LSGD DATED 08/11/2010** - **EXHIBIT R6(B) TRUE COPY OF THE LETTER ISSUED BY THE GOVERNMENT DATED 20/10/2011** - **EXHIBIT R6(C) TRUE COPY OF THE MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION** - **EXHIBIT R7(1) TRUE COPY OF THE FORM NO.1123 PART II ACKNOWLEDGEMENT DATED 14/9/2009 ISSUED BY THE MANAGER, DISTRICT INDUSTRIES CENTRE, PALGHAT UNDER THE DEPARTMENT OF INDUSTRIES, GOVERNMENT OF KERALA** **2/-** **-2-** **WP(C)NO.16661/2013** **EXHIBIT R7(2) TRUE COPY OF THE ISO 9001 : 2008 CERTIFICATE ISSUED BY THE CERTIFICATION BODY OF TUV SUD SOUTH ASIA PRIVATE LIMITED** - **EXHIBIT R7(3) TRUE COPY OF THE CERTIFICATE OF REGISTRATION DATED 23/9/2009 ISSUED BY THE COMMERCIAL TAX OFFICER, PATTAMBI** - **EXHIBIT R7(4) TRUE COPY OF THE KERALA STATE ENERGY CONSERVATION COMMENDATION CERTIFICATES, 2012 ISSUED ON 14/12/2012** - **EXHIBIT R7(5) TRUE COPY OF THE ORDER NO.2626/A2/2011/SPD DATED 20/10/2011 BY THE SECRETARY TO GOVERNMENT, STORES PURCHASE (A) DEPARTMENT TO THE MANAGER, KERALA STATE INDUSTRIAL ENTERPRISES** - **EXHIBIT R7(6) TRUE COPY OF THE TERM DEPOSIT ADVICE BY THE STATE BANK OF TRAVANCORE FOR RS.6,98,500/- (RUPEES SIX LAKHS NINETY EIGHT THOUSAND FIVE HUNDRED ONLY) WHICH IS PLEDGED TO THE SECRETARY OF THE 6TH RESPONDENT.** - **EXHIBIT R8(1) TRUE COPY OF THE ACKNOWLEDGEMENT DATED 2/9/2009 ISSUED BY THE DISTRICT INDUSTRIES CENTRAL ERNAKULAM.** ## **/TRUE COPY/** ## **P.S.TO.JUDGE** **sts** ## **A.M.SHAFFIQUE, J** *** * * * * * * * * * * * *** W.P.C.Nos.16661 of 2013 & 20328 of 2013 ---------------------------------------Dated this the 30[th] day of September 2013 ## **J U D G M E N T** These two writ petitions are filed challenging the action taken by the Local Self Government Department of the Government in entrusting with the Kerala Rural Employment and Welfare Society (hereinafter referred to as KREWS), the right to invite tenders for supply of electrical equipments to Grama Panchayats, pursuant to which tender notification was issued and the tender had been finalised in favour of the seventh respondent in W.P.C No.16661 of 2013. 2. Since common questions arise for consideration in the above writ petitions those are decided together. For easy reference the documents relied upon are as described in W.P.C No.16661 of 2013. 3. The facts involved in the present writ petitions would disclose that originally the Grama Panchayats used to W.P.C.Nos.16661 of 2013 & 20328 of 2013 2 purchase various items for street lighting from small scale industrial units by resorting to the procedure prescribed under the Stores Purchase Manual (for short 'SPM'), in terms of G.O.(P) No.2/95/SPD dated 04/02/1995. By virtue of Ext.P3 circular issued by the Stores Purchase Department of the Government the Panchayats were to strictly adhere to the provisions of SPM. 4. The 1[st] petitioner in W.P.C.No. 16661 of 2013 is the Association of Suppliers of Small Scale Industrial Units and the other petitioners individual suppliers of electrical materials to Grama Panchayats. The petitioners in W.P.C.No. 20328 of 2013 are also persons engaged in the supply of electrical equipments to Grama Panchayats. 5. The complaint of the petitioners is that, contrary to the above procedure, the Government issued Ext.P4 Government order directing the Grama Panchayats in the four districts in State of Kerala to purchase electrical equipments required by it only through KREWS. Pursuant to W.P.C.Nos.16661 of 2013 & 3 20328 of 2013 Ext.P4, Ext.P5 tender notice was issued inviting tenders from manufacturers/authorised suppliers for the supply of electrical equipments worth more than ` 12 crores. The main contention urged by the petitioners while impugning the Government order is as under: i) To provide street lighting and maintenance is the mandatory function of the Panchayats under the Kerala Panchayat Raj Act (hereinafter referred as 'the Act'). It is the constitutional duty of the Panchayat under the Act to regulate the execution of the work by tender and competitive process. The Panchayat Raj (Execution of Public Works) Rules, 1997 (hereinafter referred as 'EPW Rules') have been framed which regulates the procedure to be adopted for procuring such materials. The Government has no power to issue an executive order contrary to the statutory provisions or the rules framed for award of contracts by the Panchayat. W.P.C.Nos.16661 of 2013 & 4 20328 of 2013 ii) The impugned order is mala fide in so far as it restricts the right to outsource the electrical equipments by tender through KREWS only in four northern districts and no specific reason is stated not to implement the order in other districts. That apart the Pachayats have no option in the matter. iii) The Stores Purchase Department in the Government of Kerala has issued SPM containing general rules and instructions applicable to all departments regarding purchase of stores required for use in public service. As per paragraph 2A of SPM, it is provided that the Rules apply to purchase of all materials by local bodies as well. Hence it is contended that the second respondent, the Local Self Government Department has no authority to issue the impugned Government Order. iv) As per paragraph 38A of SPM, price preference is allowed for product supplied by small scale industries within the State of Kerala. Certain items of stores are reserved for W.P.C.Nos.16661 of 2013 & 5 20328 of 2013 procurement exclusively from small scale sector in the State. The street light fittings are included as item 188 in Appendix 28 for exclusive purchase from small scale industries. Ext.P3 circular issued by the Government on 30/01/2009 directs the Local Self Government Institutions and other statutory bodies to purchase the items including the electrical fittings from small scale industries. The impugned order is issued ignoring the provisions of the SPM and Ext.P3 circular. v) As per the Rules of business of the Government especially Rule 26 when the subject of a case concerns more than one department, no order shall be issued until it has been considered by all the departments concerned. As per Rule 33, all important cases involving adoption of new principles, new schemes and proposals suggesting deviation from existing rules and practice shall be circulated to the Ministers concerned by the Secretaries of respective departments through Chief Secretary to Government. W.P.C.Nos.16661 of 2013 & 6 20328 of 2013 Petitioners have a case that the rules of business was not complied with before issuing the impugned order. vi) In terms of Ext.P4 the sixth respondent is directed to resort to open tendering process. The fee prescribed for tender document is Rs.25,000/-. This is to avoid the number of participants in the tender especially small scale industrial units and therefore the above action is clearly mala fide. 6. Counter affidavit is filed by respondents 1 and 2 inter alia contending that SPM is only a manual issued by the Government for the proper guidance of purchase and it is only in the form of an executive instruction which has no statutory force. The Government is having the full authority and power to take decisions and to issue orders departing from the procedure prescribed under the SPM. Respondents justified their stand in issuing Ext.P4 inter alia contending that KREWS is a fully owned Government Society and the very intention of the Government is to procure electrical materials by an open tender system so that the materials 7 W.P.C.Nos.16661 of 2013 & 20328 of 2013 could be supplied to the local authorities at a very competitive rate and avoid unnecessary expenditure in that regard. Reference is made to Article 19(6)(ii) of the Constitution of India inter alia stating that the Government of the State can have monopoly over any business, trade or occupation either in complete or in partial exclusion of any individual for the purpose of promoting any public sector undertaking or any State owned companies or societies. It is contended that there was sufficient deliberations and discussions by the Local Self Government Department with the Stores Purchase Department before issuing the impugned order. It is further indicated that at present electrical accessories for street lighting are purchased through competitive tenders by each Panchayat by publishing tender notice in the leading dailies. By way of advertisement itself huge amounts are being spent by each Grama Panchayat which is a burden to the Panchayat to a great extent. It is to safeguard and to avoid draining of huge W.P.C.Nos.16661 of 2013 & 20328 of 2013 8 public money, the Government has decided to procure the electrical accessories under a common competitive tender process. It is also stated that when the items are procured by each Grama Panchayat they are of poor quality and procured at a relatively higher price. It is to ensure the quality and to avoid huge advertising charges the Government have decided to procure the electrical accessories from a common source and to supply the items at subsidised rate to Grama Panchayats and on an experimental basis in Malappuram, Kozhikode, Kannur and Kasragod districts. 7. It is further contended that KREWS is a society which is registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955 with all the Grama panchayats of the State as its members. The Director of the Panchayat is the Managing Director and the Chairman. The Society had requested the Government to give sanction for procurement of electrical fittings through W.P.C.Nos.16661 of 2013 & 20328 of 2013 9 an open window scheme in order to safeguard the interest of its members and for the well being of public. It is after considering all such facts and circumstances and with bona fide intention and in public interest that the Government issued Ext.P4 order authorising KREWS for procurement and supply of electrical items. 8. Counter affidavit is filed by the sixth respondent as well. They have reiterated the stand taken by respondents 1 and 2 in the matter. It is contended that though the SPM had provided provisions for promoting small scale industrial units, such units are not engaged in manufacture of street light fittings whereas they procure it from outside the State and supply it in their own brand name. Such was the practice going on. That apart, the Panchayats were incurring substantial expenditure for releasing advertisement for open tender. Once it is commonly purchased the expenditure will be considerably reduced and there will be enough opportunity for W.P.C.Nos.16661 of 2013 & 10 20328 of 2013 competition among the suppliers and the quality of the products can also be verified which will be beneficial to the Panchayats. According to them, since all the Panchayats are members in KREWS, the suppliers cannot make a complaint regarding the decision taken by the Panchayats in the matter. The additional 7[th] respondent has filed a counter affidavit expressing their need for early orders in the case as he was awarded the tender being the lowest. 9. Having regard to these submissions, the question to be considered in this writ petition is the validity of Ext.P4 order issued by the Government. 10. Ext.P4 is issued by the Local Self Government Department which inter alia states that the Secretary of KREWS had made a request to procure street light fittings, electrical items and its accessories through them for the purpose of Grama Panchayats and if such a method is adopted, the Panchayats will have the benefit of good quality equipments at a lesser price. Such a method is W.P.C.Nos.16661 of 2013 & 11 20328 of 2013 recommended by the Director of Panchayat as well. The Government having considered the issue in detail has decided to entrust KREWS with the right to invite tenders for the purpose of procuring electrical fittings and other accessories at a price less than the market price for the Grama Panchayats. Initially the system will be in operation in the Districts at Malappuram, Kozhikode, Kannur and Kasaragod and it is made clear that such street lightings, electrical items and accessories shall be purchased only through KREWS. 11. It is argued by the learned Senior Counsel Sri.K.Ramakumar that it is the mandatory function of the Panchayat to provide street lighting and maintenance to the Panchayat area and the rules prescribed for procuring materials clearly indicates the manner in which such materials are to be procured. In the absence of any amendment to the Rules, the Government cannot by way of a Government Order which is in the form of an executive W.P.C.Nos.16661 of 2013 & 12 20328 of 2013 order impose on the Panchayat that they shall procure the materials only through KREWS. It is also argued that the Government order does not anywhere indicate the source of power under which such an order is issued. It is argued that there is no provision either in the Panchayat Raj Act or the Rules framed thereunder giving the Government an absolute right to interfere with the affairs of the Panchayat for which the statute has made sufficient provisions and Rules have been framed. It is also pointed out that the action of the Government is clearly mala fide on account of the absolute ban imposed on the Panchayats in procuring electrical fittings and accessories. 12. Smt.Molly Jacob appearing for the petitioner in W.P.C No.16661 of 2013 further contends that despite the fact that the Government has no power to issue the impugned order, there was no consensus with the Stores Purchase Department, which is mandatory in nature. That apart, the right of small scale industries to participate in W.P.C.Nos.16661 of 2013 & 13 20328 of 2013 supply of materials to the Panchayat has been completely denuded by the impugned order. It is contended that the very intention of issuing such an order entrusting the procurement of materials with KREWS is only to avoid the small scale industries from effecting supplies, which will ultimately lead to closure of such industries. Reference is also made to judgment of the learned Single Judge of this court in **Abdul Russak v. Cheranalloor Grama Panchayat** _[2005 (3) KLT 686]_ in order to contend that the Local Self Government institutions are to strictly follow the conditions in the SPM for the purpose of procurement of materials. Another judgment relied upon is **Valanchery Service Co-operative Bank Ltd v. State of Kerala** _[2006 (1) KLT 425]_ to indicate that when a village Panchayat has exclusive power to administer matters relating to running of Anganwadies, the Government cannot interfere and issue directions in individual cases by exercising the power under Section 166(2) of the Act. The power of the Government is W.P.C.Nos.16661 of 2013 & 20328 of 2013 14 only to issue guidelines. 13. On the other hand, it is contended by the learned Government Pleader that the source of power can be traced to Section 176B read with section 189 of the Act. Reference is also made to the judgment of the Supreme Court in **C.K.Achuthan v. State of Kerala and Others** _[AIR 1959 SC 490]_ in which the Supreme Court has held at Paragraph 8 as under: _“8. The gist of the present matter is the breach, if any, of the contract said to have been given to the petitioner which has been cancelled either for good or for bad reasons. There is no discrimination, because it is perfectly open to the Government, even as it is to a private party, to choose a person to their liking, to fulfil contracts which they wish to be performed.When one person is chosen rather than another, the aggrieved party cannot claim the protection of Art. 14, because the choice of the person to fulfil a particular contract must be left to the Government. Similarly, a contract which is held from Government stands on_ W.P.C.Nos.16661 of 2013 & 15 20328 of 2013 _no different footing from a contract held from a private party. The breach of the contract, if any, may entitle the person aggrieved to sue for damages or in appropriate cases, even specific performance, but he cannot complain that there has been a deprivation of the right to practise profession or to carry on any occupation, trade or business, such as is contemplated by Art. 19 (1) (g). Nor has it been shown how Art. 31 of the Constitution may be invoked to prevent cancellation of a contract in exercise of powers conferred by one of the terms of the contract itself."_ 14. The learned Government Pleader also highlighted the necessity for issuing such an order in view of the urgent necessity to procure quality materials for Grama Panchayats at a lesser rate. Senior counsel Sri.S.Sreekumar appearing on behalf of KREWS relies upon the fact that it is a Government controlled society having as its members all the Grama Panchayats. Therefore any decision taken by the Government to entrust the procurement of materials to the W.P.C.Nos.16661 of 2013 & 20328 of 2013 16 KREWS is on behalf of the Panchayats itself. None of the Panchayats have any objection regarding procurement of materials through the agency of KREWS. Therefore the petitioners who were suppliers to Grama Panchayats cannot have a claim either under Article 14 of the Constitution of India or under Article 19(1)(g). It is open for any supplier who meets the qualification criteria to apply for the tender and compete in the tender process. It is contended that the tender process had been completed and the additional seventh respondent had been selected for the tender and only on account of the stay granted in the case that the final orders had not been issued. The learned counsel appearing for the seventh respondent stresses the need for immediate orders as he procured the contract and arrangements had to be made for effecting supplies. 15. The first question to be considered is the power of the Government to issue Ext.P4 order. As per Section 166 of the Act, it is the duty of the Village Panchayat to meet the W.P.C.Nos.16661 of 2013 & 17 20328 of 2013 requirements of the Village Panchayat area in respect of matters enumerated in the third schedule. The 3[rd] schedule relates to mandatory functions of the Panchayat and item No.15 is “street lighting and its maintenance”. Therefore it cannot be disputed that street lighting and its maintenance is a mandatory function of the Village Panchayat. Reference is made to the EPW Rules. Rule 3 specifically provides the manner in which Public Works are to be done which reads as under: ## _“_ _**3. Procedure and execution of public**_ _**works.-** (1) The Panchayat shall prepare a priority list of the public works intended to be executed in a Panchayat by including in the scheme or otherwise, at the beginning of a financial year._ _(2) The rough cost estimate of each public work intended to be executed shall be prepared accordingly._ _(3) Subject to sub-rule (1) of Rule 6, the Panchayat shall decide how to execute each public work; whether on contract basis, or directly by the_ W.P.C.Nos.16661 of 2013 & 20328 of 2013 18 _Panchayat or through the beneficiary committee and that shall be made clear while administrative sanction is given._ _(4) The Panchayat may decide whether a public work may be executed through contractors if such public work involves technicality, machinery to be used and required the supervision of experts or directly by the Panchayat if it can be executed urgently and profitably be using local materials or through beneficiary committee if it can be executed by the participation of beneficiary committee:_ _Provided that when a method of public work is decided accordingly, the possibility to execute the work through the beneficiary committee is to be considered and priority shall be given to such method and if the priority cannot be given the reason for the same shall be specified the decision of Panchayat:_ _Provided further that the execution of public works according to the scheme formulated by the Central or State shall be subject to the guidelines issued by the Central Government or the State Government in this regard._ W.P.C.Nos.16661 of 2013 & 19 20328 of 2013 _(5) If the Panchayat is convinced that a contract that may be fixed for any public work is having inordinate rate or the contract period is longer and if such work can be executed at a lower cost, directly by the Panchayat or through the beneficiary committee, the Panchayat may so decide._ _(6) The manner in which a public work is decided to be executed, the reason for such a decision shall be specified in the decision of Panchayat._ _**Explanation** .- If a patasekhara committee or a parent teacher association or any other similar committee is functioning in a Panchayat and in the case of a public work connected with it, such committee may be considered as a beneficiary committee.”_ 16. It is the contention of the petitioners that this procedure had been ignored while issuing the impugned order. The EPW Rules also provided for invitation of tenders, finalisation of tender documents, acceptance of tenders, entrustment of works by negotiation by the Panchayat W.P.C.Nos.16661 of 2013 & 20 20328 of 2013 directly, execution of works through beneficiary committee etc. Rule 18 further indicates that : _“_ _**Observance of procedure in the Government Department** .- Save as otherwise expressly provided in these rules, the rules and methods adopted in the Public Works Department of Government in the matter of preparation of estimates and plans of works, invitation of tender, execution of work, payment for such works, system of accounting etc. shall be followed in respect of execution of public works.”_ 17. Therefore it cannot be disputed that as far as street lighting and maintenance is concerned it is purely a work in which the Panchayat has absolute authority to invite tenders, to procure materials and to do the work either directly or through Contractors or through beneficiary committees. 18. However, the Learned Government Pleader referred to Section 176B of the Act which reads as under: W.P.C.Nos.16661 of 2013 & 21 20328 of 2013 _“_ _**176B. Provision for lighting public streets.-** (1) A Village Panchayat shall cause all public streets in its area to be lighted and for that purpose shall provide such lamps and works as may be necessary._ _(2) For the purpose of sub-section (1) Kerala State Electricity Board shall provide necessary electric energy and other technical assistance to the Village Panchayat at the rate fixed by the Government and on such other terms as prescribed._ _(3) Notwithstanding anything contained in sub-section (1) the Government may in consultation with the Village Panchayat arrange a lighting system on any public streets through an agency approved by the Government._ _(4) Notwithstanding anything contained in this section, a Village Panchayat or any other local self Government Institutions may jointly arrange and maintain a street lighting system.”_ 19. Sub section (3) of section 176B clearly indicates that notwithstanding anything contained in sub section (1) wherein it is stated to be the obligation of the Village W.P.C.Nos.16661 of 2013 & 22 20328 of 2013 Panchayat to light all public streets in its area and for that purpose to provide such lamps, the Government may, in consultation with the Village Panchayat, arrange a lighting system on any public streets through an agency approved by the Government. The argument is that the Government has the power to make such arrangements to provide the lighting system on the public streets and source of power for issuing Ext.P4 order can be traced out to the said section. That apart, it is contended that it is open for the Government to appoint an agency of the Government to procure the materials necessary for electrification of a Panchayat area in terms of Article 19(6)(ii) of the Constitution of India. Such an action cannot be questioned by the petitioners on the ground of violation of Article 14 or 19(1)(g). Therefore, having regard to the aforesaid statutory provisions, it has to be verified whether the Government has the power to issue Ext.P4 order. W.P.C.Nos.16661 of 2013 & 23 20328 of 2013 20. Before arriving at a finding the background of formation of KREWS is to be considered. KREWS is a Cooperative Society formed with membership of all the Panchayats in the State. Therefore, it is a society fully owned and controlled by the Grama Panchayat's as well as the State. The said organisation had requested the Government to permit them to procure street lighting materials, equipments and accessories by way of public tender in order to reduce the cost of procuring quality materials. By Ext.P4 order, the Local Self Government Department permitted such a course. Therefore, it could be seen that as far as Panchayats are concerned, they themselves are members of the Society and that Society had made a request to the Government to permit purchase of electrical equipments by a tender process by all the Panchayats together and as an initial phase such a permission had been granted to enable KREWS to procure materials for Panchayats situated in four northern districts. W.P.C.Nos.16661 of 2013 & 24 20328 of 2013 Of course, it is made clear that such Panchayats shall not procure the materials from other sources. Therefore it cannot be stated that Ext.P4 is an order passed by the Government unilaterally. It is at the instance of the Society which is having the Grama Panchayats by itself as its members. If the members viz the Panchayats have no objection in procuring the electrical materials by such a process, can it be objected by the suppliers. The legal validity of Ext.P4 order and the source of power of the Government is to be understood in the light of the fact that none of the Panchayats have any objection in proceeding in accordance with the procedure contemplated under Ext.P4. If that is the situation, can a supplier of goods complain that there is violation of Article 14 of the Constitution of India. 21. Chapter XVIII of the Act deals with the functions of the Government and Section 189 relates to the general power of the Government to issue guidelines. W.P.C.Nos.16661 of 2013 & 25 20328 of 2013 _**189. General power of Government to issue guidelines and to conduct enquiry** .- (1) Notwithstanding anything contained in this Act, the Government shall have the power to issue general guidelines to the Panchayats in accordance with the National and State Policies in matters such as finance, maintenance of accounts, office management, formulation of schemes, selection of sites and beneficiaries, proper functioning of Grama Sabha, welfare programmes and environmental regulations and the Panchayats shall comply with such directions._ _(2) If there is any default in the implementation of schemes or maintenance of accounts or complaint is received in the matter, Government may arrange for enquiry into the matter and the Panchayat shall co-operate with such enquiry._ _(3) After such enquyiry, Government may take such action as is necessary and permissible under this Act.”_ 22. Having regard to these statutory provisions, it is clear that the Government has a supervisory role to issue W.P.C.Nos.16661 of 2013 & 26 20328 of 2013 guidelines in relation to matters concerning the functions of the Grama Panchayat. While issuing such guidelines, the Government can also formulate policies with the consent and approval of the Panchayats. In the present case, KREWS is a society formed by all the Panchayats as its members. It is a collective action by all the Panchayats of the State and they have decided to adopt a procedure for acquiring electrical fittings and accessories for street lighting facilities by calling for tenders through KREWS. Therefore, despite the availability of the EPW Rules and the statutory function of the Panchayat, it is the decision of the Panchayats to participate in a process to acquire the materials through KREWS. It cannot be stated as a unilateral action on the part of the Government. That apart as argued by the learned senior Government pleader, section 176B(3) is also a source of power available to the Government to provide lighting system in consultation with the Panchayat, through an agency approved by the Government. Hence, I am of the W.P.C.Nos.16661 of 2013 & 27 20328 of 2013 view that the Government has the power to issue Ext.P4. 23. One another argument raised is regarding the conflict with SPM. It is the argument that Panchayats shall only follow the procedure under the SPM and small scale industrial units were given certain preferences under the SPM. First of all, SPM is not a document having any statutory force. It is only a guideline providing a procedure to be followed by government departments and local authorities for purchase of materials. If the local authority decides to adopt a different procedure as approved by the Government, I do not think that it will be open for the suppliers who get a preference under the SPM to complain that the Government/local authority should not follow a different procedure. The benefit given to small scale industrial units in the SPM under a guideline has no statutory force. The said benefit can be withdrawn at any point of time. Such benefits cannot be treated as a legal right or a vested right and cannot be enforced. Therefore availability W.P.C.Nos.16661 of 2013 & 28 20328 of 2013 of a machinery under the SPM for purchase of electrical fittings cannot be a reason to discard a new procedure adopted by the Government, based on a collective decision of the Panchayats through a society like KREWS and the decision taken to purchase materials by a collective tender process. 24. Another argument raised is with reference to the rules of business of the Government. According to the learned counsel for the petitioners, as per rules of business of the Government in matters relating to two departments any decision can be taken by one department only with the consent of the other department which is also involved in the matter. The argument is that the Local Self Government department by themselves cannot override the SPM and the process of purchasing materials which was approved by the Stores purchase Department. This argument has no basis. First of all, Grama Panchayats are entitled to follow their own procedure as provided under EPW Rules. While W.P.C.Nos.16661 of 2013 & 29 20328 of 2013 exercising power under the said Rules they normally follow the procedure prescribed under SPM as per the guidelines issued by the Government. The Government itself had adopted a different method for purchase of materials through an agency in which all the Panchayats are members. This apparently is a decision taken by the Local Self Government department and there is nothing wrong in the said department issuing Ext.P4 order and there is no conflict with the rules of business. That apart, as argued by the learned Senior Government Pleader, State Government can have monopoly in a matter relating to promotion of a State Government undertaking. Apparently, KREWS is a society formed by the State Government for the benefit of the State Government institutions. The said authority is entrusted with the right to procure materials for the Grama Panchayats. The same is protected under Article 19(6)(ii) of the Constitution of India. Prescription of fee for participating in the tender is purely a commercial decision W.P.C.Nos.16661 of 2013 & 30 20328 of 2013 which cannot be questioned by the petitioner. 25. Having regard to the aforesaid findings, I do not think that the petitioners have made out a case for interference with the impugned order and the process of tender undertaken by KREWS. Accordingly, these writ petitions are dismissed. **(A.M.SHAFFIQUE, JUDGE)** jsr