Kerala High Court

Faisal B.E vs Kerala State Civil Supplies ... on 5 January, 2021

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

                 THE HONOURABLE SMT. JUSTICE P.V.ASHA

    TUESDAY, THE 05TH DAY OF JANUARY 2021 / 15TH POUSHA, 1942

                      WP(C).No.21347 OF 2020(P)


PETITIONER:

               FAISAL B.E,
               AGED 45 YEARS,
               MEHRIN MANZIL, KUTHIYATHODE, CHERTHALA,
               ALAPPUZHA - 688 533.

               BY ADVS.
               SRI.K.I.MAYANKUTTY MATHER
               KUM.NARAYANI HARIKRISHNAN

RESPONDENTS:

      1        KERALA STATE CIVIL SUPPLIES CORPORATION LTD.,
               REP. BY ITS MANAGING DIRECTOR, MAVELI BHAVAN, GANDHI
               NAGAR, P. B. NO.2030, KADAVANTHRA P.O., ERNAKULAM -
               682 020.

      2        THE GENERAL MANAGER,
               KERALA STATE CIVIL SUPPLIES CORPORATION LTD., MAVELI
               BHAVAN, GANDHI NAGAR, P. B. NO.2030, KADAVANTHRA
               P.O., ERNAKULAM - 682 020.

      3        THE MANAGER (NATIONAL FOOD SAFETY ACT),
               KERALA STATE CIVIL SUPPLIES CORPORATION LTD., MAVELI
               BHAVAN, GANDHI NAGAR, P. B. NO.2030, KADAVANTHRA
               P.O., ERNAKULAM - 682 020.

      4        THE REGIONAL MANAGER,
               KERALA STATE CIVIL SUPPLIES CORPORATION LTD.
               (SUPPLYCO), OPP. YATHRI NIVAS,
               NEAR GOVERNMENT GUEST HOUSE, PRS ROAD,
               THAIKKAD P.O., THIRUVANANTHAPURAM - 695 014.

      5        ASSISTANT MANAGER,
               KERALA STATE CIVIL SUPPLIES CORPORATION LTD.
               (SUPPLYCO), CHENGANNUR P.O., KOLLAM - 691 001.

      6        THE TALUK SUPPLY OFFICER,
               CHENGANNUR TALUK, CHENGANNUR P.O.,
               ALAPPUZHA - 689 121.
 WP(C).No.21347 OF 2020(P)

                               2

      7      JOHNS MATHEW,
             KOCHUKATTIL COTTAGE, ENNAKKAD, CHENGANNUR P.O.,
             ALAPPUZHA - 689 624.

      8      ROSHAN R. VARGHESE
             CHALAI VADAKATHIL, MUTTOM, MUTTOM P. O.,
             ALAPPUZHA - 689 511.

             BY ADV. SMT.MOLLY JACOB, SC, SUPPLYCO
                     SMT.PRINCY XAVIER, GOVERNMENT PLEADER

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
05.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.21347 OF 2020(P)

                                  3



                            JUDGMENT

The petitioner is aggrieved by the

proceedings of the respondents 1 to 3 to re-

tender the work notified in Exts.P1 and P1(a)

notifications for transportation of ration

articles for Chengannur Taluk. He seeks a

direction to the respondents to process his

bid and to award him the transportation works

in that Taluk.

2. It is submitted that pursuant to

Ext.P1 read with Ext.P1(a) notifications

inviting tenders, petitioner had submitted his

bid for obtaining transportation contracts for

Chengannur Taluk. Respondents 7 and 8 had also

submitted their bids for the very same Taluk;

but the bid submitted by them were rejected as

they were found disqualified on grounds stated

in Ext.P2 remarks. Therefore petitioner became WP(C).No.21347 OF 2020(P)

the sole qualified bidder. According to the

petitioner, the work is to be awarded to him

without resorting to fresh notice inviting

tender. In support of the claim of the

petitioner, it is stated that as per Exts.P4

and P4(a) proceedings, the respondents had in

identical circumstances awarded the work to

the only qualified tenderer in the previous

year in Chengannur, Mavelikkara and Kuttanad.

Therefore, according to the petitioner, there

is no reason to adopt a different course of

action this year deviating from the action

taken by the respondents in Exts.P4 and P4(a).

3. The 1st respondent has filed a

statement pointing out that the appointment of

transporting contractors by the Civil Supplies

Corporation started in the year 2017. It is

stated that the Corporation had faced bitter

experience in 2017 in timely lifting of ration WP(C).No.21347 OF 2020(P)

articles and effecting doorstep delivery of

ration articles to the Fair Price Shops for

distribution to the public and therefore

tender conditions were modified in Ext.P1 read

with Ext.P1(a). It is further stated that in

order to prevent cartel formation among the

tenderers as well as withdrawal of L1 from the

tender, giving room for L2 to get the work,

the Corporation had enhanced the EMD from

Rs.1,00,000 to Rs.5,00,000/-. Similarly, a

stipulation was made in clause 18 that if L1

bidder in any category of work unilaterally

resiles from the bid in any category, his bids

for other categories of work in any other

Taluks would also not be considered and the

entire EMD would be forfeited. It is stated

that defective tenders were submitted in this

background for enabling a single tenderer to

get the work and there were several defective WP(C).No.21347 OF 2020(P)

tenders. It is stated that the technical bid

submitted by the respondents 7 and 8 were

rejected in view of such defects. According to

the respondents, petitioner does not have any

right to get the work awarded in his favour

just because other tenderers got disqualified.

It is also stated that it is for the 1st

respondent to take a decision with respect to

the further proceedings and to decide whether

the work is to be re-tendered or not. It is

also stated that the 1st respondent has got

every right to go for a re-tender in order to

get competitive rates, which alone would be in

public interest.

4. I heard the learned counsel for the

petitioner as well as the learned Standing

Counsel.

5. According to the learned counsel for

the petitioner, since the bid amount is made WP(C).No.21347 OF 2020(P)

public there is every possibility that other

tenderers would quote lower amounts whereby

the chance of the petitioner would be lost.

That would prejudicially affect the

petitioner. It is also his case that the

respondents have to follow the procedure

adopted in previous years.

6. The respondent Corporation has stated

that a re-tender was found required as there

were no competitive tenders. They have also

explained that taking cue from the past

experience, they have stipulated certain

conditions in order to see that there is no

cartel formation and to avoid any possible

loss to the corporation. As rightly contended

by Smt.Molly Jacob, the learned Standing

Counsel for the Corporation, relying on the

judgment in Air India Ltd v. Cochin

International Airport Ltd [2000 (2) SCC 617], WP(C).No.21347 OF 2020(P)

even in a case where certain defects are found

in the decision making process, intervention

of this Court under the Article 226 is called

for only in cases where public interest demand

the same. In case the respondent found it

necessary to re-tender the work in order to

get competitive rates, instead of going for a

single tenderer, it is not for this Court to

interfere with it and substitute their

opinion.

7. In the judgment in Michigan Rubber

(India) Limited V State of Karnataka [(2012) 8

SCC 216], the Apex Court while considering a

case where the modification of pre-

qualification criteria specified by the

Karnataka State Road Transport Corporation

while floating a tender for supply of tyres,

tubes, etc was challenged alleging that the

same was for excluding the appellant from the WP(C).No.21347 OF 2020(P)

bidding process on extraneous considerations,

held as follows after analysing a series of

judgments:

"24. Therefore, a court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached" and

(ii) Whether the public interest is affected? If the answers to the above questions are in the negative, then there should be no interference under Article 226."

8. A three Judge Bench of the Apex Court

in Municipal Corpn., Ujjain v. BVG India Ltd.

[(2018) 5 SCC 462], wherein appointment of an

agency for collection of solid waste and its

transportation based on tenders invited by WP(C).No.21347 OF 2020(P)

Ujjain Municipality was under challenge, held

as follows,

"The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by this Court in Tata Cellular v. Union of India: (1994)6 SCC 651, wherein this Court observed that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favouritism. However, there are inherent limitations in exercise of that power of judicial review. The Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose, the exercise of that power will be struck down.

The modern trend points to judicial WP(C).No.21347 OF 2020(P)

restraint in administrative action. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision without the necessary expertise which itself may be fallible. The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or a quasi-administrative sphere. However, the decision must not only be tested by the application of the Wednesbury principle of reasonableness, but must also be free from arbitrariness and not affected by bias or actuated by mala fides. [See the judgment in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd.

xxxxxxxx

14. The judicial review of administrative action is intended to prevent arbitrariness. The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; if the process adopted or WP(C).No.21347 OF 2020(P)

decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference under Article 226.

                     xxxx
                   The        State,                    its            corporations,

instrumentalities and agencies have a public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary power under Article 226 with great caution and should exercise them only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.

                     xxxxx"                              (emphasise supplied)



         9.        The   complaint                 of     the         petitioner         is

that re-tender would affect his interest. But

the Corporation is expected to protect public WP(C).No.21347 OF 2020(P)

interest. It is for the Tender Inviting

Authority to decide how they should proceed

with the tender in public interest.

10. In the case of the petitioner, not

even a selection notice was issued. The only

thing is that he became the only bidder who

was found qualified because the respondents 7

and 8 got disqualified. On that reason, it

cannot be said that the petitioner is

conferred with any right to get the work