G.Balakrishnan Nair vs State Of Kerala
2021 Latest Caselaw 19215 Ker

         IN THE HIGH COURT OF KERALA AT ERNAKULAM
                          PRESENT
        THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
  TUESDAY, THE 14TH DAY OF SEPTEMBER 2021 / 23RD BHADRA,
                           1943
                  WP(C) NO. 15259 OF 2021
PETITIONER:

          SHRI.G.BALAKRISHNAN NAIR,
          AGED 62 YEARS, S/O. GOPALA PILLAI,
          GOKULAM, 32/2255A, NEW KALAVATH ROAD,
          PALARIVATTOM, KOCHI-682025.
          BY ADVS.
          S.SREEKUMAR (SR.)
          P.MARTIN JOSE
          P.PRIJITH
          THOMAS P.KURUVILLA
          R.GITHESH
          AJAY BEN JOSE
          MANJUNATH MENON
          SACHIN JACOB AMBAT
          HARIKRISHNAN S.


RESPONDENTS:

    1     STATE OF KERALA,
          REPRESENTED BY ITS PRINCIPAL SECRETARY,
          IRRIGATION AND WATER RESOURCES DEPARTMENT,
          SECRETARIAT, THIRUVANANTHAPURAM-695001.
    2     THE CHIEF ENGINEER,
          IRRIGATION AND ADMINISTRATION,
          THIRUVANANTHAPURAM-695013.
    3     THE SUPERINTENDING ENGINEER,
          IRRIGATION SOUTH CIRCLE, 2ND FLOOR,
          CWC BUILDING, LMS COMPOUND,
          THIRUVANANTHAPURAM-695033.
 W.P.(C) No.15259 of 2021        2


     4      MR. PRAVEEN KUMAR K.G.,
            SOUPARNIKA, THALAVADY P.O.,
            ALAPPUZHA-689572.
            SMT.PRINCY XAVIER GOVERNMENT PLEADER
            SRI.K.JAJU BABU (SR.)
            SRI.BRIJESH MOHAN
            SMT.RESMI G. NAIR


         THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 14.09.2021, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
 W.P.(C) No.15259 of 2021                3




                        P.B.SURESH KUMAR, J.
                  -------------------------------------------
                     W.P.(C) No.15259 of 2021
              -----------------------------------------------
         dated this the 14th day of September, 2021


                             JUDGMENT

In terms of Ext.P1 tender notice, the third

respondent invited online bids for executing a work for removal

of earth deposited during flood from 'varattar' and

'Adhipamba' rivers in Pathanamthitta District. Both petitioner

and the fourth respondent submitted bids pursuant to Ext.P1

tender notice. The bid submitted by the fourth respondent was

the highest. Though the rate quoted by the fourth respondent

was Rs.501/- per cubic meter, on negotiation, the fourth

respondent raised his offer to Rs.684/- per cubic meter. On

02.06.2020, the third respondent awarded the work to the

fourth respondent and directed him to furnish the security

deposit namely Rs.2,19,65,800/-in the manner prescribed and

execute the agreement in stamp paper worth Rs.4,39,400/-

within 14 days without fine and within 24 days with fine.

Ext.P5 is the selection notice issued by the third respondent to

the fourth respondent in this regard. The fourth respondent did

not furnish the security deposit within the time stipulated in

Ext.P5 selection notice. Instead, on 25.09.2020, he submitted a

representation to the third respondent seeking orders enlarging

the time fixed for furnishing the security deposit and execution

of the agreement in the light of the restrictions imposed by the

Government for preventing the spread of Covid-19 pandemic.

On the basis of the request made by the the fourth respondent,

the third respondent granted time to the fourth respondent till

26.10.2020 for furnishing security deposit and execution of the

agreement. Ext.R3(a) is the communication issued by third

respondent in this regard on 21.10.2020.

2. It appears that the third respondent

entertained a doubt in the meanwhile as to the amount of the

security deposit to be furnished by the fourth respondent, and

after clearing the said doubt, the third respondent issued

Ext.P6 communication to the fourth respondent on 30.10.2020

stating that the amount of the security deposit to be furnished

by him is Rs.4,39,31,500/-. In terms of Ext.P6 communication,

the third respondent directed the fourth respondent to furnish

the security deposit and execute the agreement within seven

days from the date of receipt of the said communication. The

fourth respondent did not execute the agreement within the

time stipulated in Ext.P6 communication as well. Instead, as

the security deposit was doubled, on 23.12.2020, the fourth

respondent preferred a representation to the third respondent

seeking permission to furnish the security deposit in

instalments. Ext.R4(f) is the representation submitted by the

fourth respondent in this regard. Ext.R4(f) representation was

rejected by the third respondent on 24.03.2021.

             3.   In   the      meanwhile,      on   11.02.2021,       the

petitioner    submitted      Ext.P7   representation    to    the   third

respondent requesting the third respondent to award the work

to him pointing out that since the fourth respondent has not

furnished the security deposit and executed the agreement

within the time stipulated in Ext.P5, the work ought to have

been awarded to the petitioner. On the same day on which the

request of the fourth respondent to furnish the security deposit

in instalments was rejected, the third respondent gave Ext.P8

communication to the petitioner requiring to intimate the third

respondent as to whether the petitioner is prepared to

undertake the work at the rate of Rs.684/- per cubic meter

quoted by the fourth respondent. In response to Ext.P8

communication, the petitioner submitted Ext.P9 willingness to

execute the work at the rate quoted by the fourth respondent.

No action was, however, taken on Ext.P9 willingness furnished

by the petitioner. The petitioner, in the circumstances,

preferred a representation to the Chief Minister of the State

complaining about the inaction on the part of the third

respondent in awarding the work to him. Ext.P11 is the

representation submitted by the petitioner to the Chief

Minister. It appears that the said representation has been

forwarded to the office of the third respondent and in the light

of the same, the third respondent has informed the petitioner

that appropriate decision as regards the claim of the petitioner

will be taken by the second respondent soon. Ext.P12 is the

communication issued by the third respondent in this regard.

The writ petition is filed immediately thereafter seeking

directions to respondents 2 and 3 to enter into necessary

agreement with the petitioner for execution of the work. The

case set out by the petitioner in the writ petition is that insofar

as the highest bidder has not executed the agreement within

the time initially stipulated and later enlarged, the petitioner

who is the second highest bidder in the bid process ought to

have been awarded the work.

4. On 30.07.2021, this Court directed the parties

to maintain status quo as regards the work..

5. A statement has been filed on behalf of the

third respondent pointing out that since the fourth respondent

has not furnished the security deposit and executed the

agreement despite having been given sufficient time, the

second respondent, the Chief Engineer of the department has

placed the matter before the Government for appropriate

decision in this regard, and on 14.07.2021, the Government

issued Ext.R3(c) communication to the second respondent

directing him to give seven more days to the fourth respondent

to furnish the security deposit and execute the agreement. It is

stated on behalf of the third respondent that Ext.R3(c)

communication was brought to the notice of the fourth

respondent on 16.07.2021, and in the light of the said

communication, the fourth respondent ought to have furnished

the security deposit and executed the agreement on or before

23.07.2021. It is stated on behalf of the third respondent that

on the next working day, the fourth respondent requested the

third respondent to grant 15 days time more to furnish the

security deposit pointing out his inability to obtain bank

guarantee for the huge sum of money in that short span of

time as the banks are not functioning on regular basis due to

the restrictions imposed by the Government for the prevention

of the Covid-19 pandemic. It is also stated on behalf of the

third respondent in the statement that immediately thereafter

on 04.08.2021, the fourth respondent completed the

formalities for execution of the agreement including furnishing

of the security deposit and the agreement was not executed by

the department with the fourth respondent in the light of the

interim order passed by this Court in the meanwhile on

30.07.2021. It is also stated in the statement that having

regard to the disruptions caused to the normal life on account

of the pandemic, insofar as the fourth respondent has

completed all the formalities relating to the execution of the

agreement, the department does not find any impediment in

entering into the necessary agreement with the fourth

respondent for execution of the work.

6. A counter affidavit has been filed by the fourth

respondent stating, among others, that though he was

informed in terms of the selection notice that the amount of

security deposit to be furnished by him for the work is

Rs.2,19,65,800/-, the same was revised later to

Rs.4,39,31,500/- in terms of Ext.P6 communication issued on

30.10.2020, at a point of time when the Government was

considering the question of reducing the security deposits to be

furnished by the contractors for similar works in the wake of

the pandemic; that he was therefore, advised to wait until the

Government takes a decision in this regard and while so, on

07.01.2021, in terms of Ext.R4(g) order, the Government

reduced the security deposit to be furnished for similar works

substantially; that in the light of Ext.R4(g) order of the

Government, the department themselves sought clarification

from the Government as to the security deposit to be furnished

by him for the subject work, and that it was while the said

request for clarification was pending consideration before the

Government that the Government has issued Ext.R3(c)

communication. It is also stated by the fourth respondent in the

counter affidavit that since no decision was forthcoming from

the Government on the issue relating to the quantum of

security deposit to be furnished by him and since the

Government has issued Ext.R3(c) decision in the meanwhile, he

decided to furnish security deposit in tune with Ext.P6

communication and it is on that basis that he has furnished

security deposit for the work. It is also stated in the counter

affidavit that the delay of a few days in complying with the

direction contained in Ext.R3(c) was due to the delay caused by

the bank in providing the bank guarantee sought by him as the

banks were not functioning on regular basis then due to the

restrictions in connection with the pandemic. It is also

mentioned by the fourth respondent in the counter affidavit

that the rate quoted by the petitioner for the work is less by

Rs.16,44,21,939/- when compared to the rate quoted by him.

7. Heard the learned Senior Counsel for the

petitioner, the learned Government Pleader as also the learned

Senior Counsel for the fourth respondent.

8. The learned Senior Counsel for the petitioner

submitted that in Ext.P5 selection notice, it is categorically

mentioned that if the fourth respondent does not execute the

agreement within the time stipulated therein, the work will be

awarded to the second highest bidder. According to the learned

Senior Counsel, admittedly the fourth respondent has not

executed the work within the time stipulated in Ext.P5

selection notice. It is argued by the learned Senior Counsel

therefore, that the third respondent ought to have awarded the

work to the petitioner as he was the second highest bidder in

the bid process. It was also argued that at any rate, since the

fourth respondent has not furnished the security deposit for the

work and executed the agreement within the time stipulated by

the Government even in Ext.R3(c) direction issued by the

Government, the work should have been awarded to the

petitioner. It was further argued that insofar as the petitioner

has agreed to execute the work at the rate quoted by the

highest bidder, the fourth respondent, there was absolutely no

justification for the third respondent in not awarding the work

to the petitioner. It was all the more so, according to the

learned Senior Counsel, since the work in question was one to

be executed on an emergent basis.

9. The learned Government Pleader has pointed

out that insofar as the fourth respondent has completed all the

formalities in connection with the execution of the agreement

pursuant to Ext.R3(c) direction issued by the Government,

though there is delay of a few days in complying with the said

direction, there is no impediment for the department in

entering into the agreement with the fourth respondent for

execution of the work. It was also pointed out by the learned

Government Pleader that but for the interim order passed by

this court on 30.07.2021, the department ought to have been

entered into the agreement with the fourth respondent for

execution of the work.

10. The learned Senior Counsel for the fourth

respondent reiterated the stand of the fourth respondent in the

counter affidavit filed in the matter. It was emphatically argued

by the learned Senior Counsel that in the light of Ext.R4(g)

order of the Government, the fourth respondent was not liable

to furnish security deposit to the tune of Rs.4,39,31,500/- for

the subject work and it was with a view to complete the work at

the earliest point of time that he has decided to comply with

the direction of the Government contained in Ext.R3(c)

communication. It was argued by the learned Senior Counsel

that in cases of this nature, the officers of the Department

would be well within their powers in granting time for execution

of the agreement for works, if the contractors concerned are

willing to execute the work on the same terms and conditions

offered by them. The learned Senior Counsel has relied on the

decision of the Apex Court in Bharat Coking Coal Ltd. v.

AMR Dev Prabha, (2020) 16 SCC 759, in support of the said

point urged by him.

11. I have perused the pleadings of the parties and

considered the contentions put forward by their learned

counsel.

12. As noted, the security deposit directed to be

furnished by the fourth respondent in terms of Ext.P5 selection

notice dated 02.06.2020 was only Rs.2,19,65,800/-. Ext.P6

communication of the third respondent indicating the revised

security deposit of the work namely, Rs.4,39,31,500/- was

issued to the fourth respondent only on 30.10.2020. The

specific case of the fourth respondent is that though he was

prepared to furnish the security deposit in terms of Ext.P5

selection notice and execute the agreement for the work on

30.06.2020, he was not permitted to do so by the third

respondent on account of the doubt entertained by him as to

the security deposit to be furnished by him for the subject

work. The fact that the fourth respondent has purchased the

stamp paper required for executing the work on 30.06.2020 is

evidenced by Ext.R4(d), the copies of the stamp paper. Ext.P6

communication and Ext.R4(d) stamp papers probablise the

case of the fourth respondent that he has made all

arrangements for execution of the agreement for the work

before 30.06.2020. Again, as noted, the revision of the security

deposit for the work was to the tune of almost Rs.2.2 crores.

Ext.R4(g) order of the Government indicates that in the wake of

the Covid-19 pandemic, on 13.5.2020, the Government of India

requested the State Governments to relax the terms of

security deposits to be furnished by the contractors in respect

of procurements and it is in the light of the said request of the

Central Government that the said order has been issued by the

Government. In other words, Ext.R4(g) would probabilise the

case of the fourth respondent that Ext.P6 communication was

issued at a point of time when the Government was examining

the question of relaxing the terms of security deposits to be

furnished by the contractors in respect of procurements. It is

seen that it is in the said circumstances, the fourth respondent

preferred Ext.R4(h) representation before the third respondent

requesting him to revise the security deposit to be furnished by

the fourth respondent in tune with Ext.R4(g) order of the

Government. It is also seen that it is having convinced that

there is merit in the request made by the fourth respondent in

Ext.R4(h) representation, the second respondent placed the

matter before the Government in terms of Ext.R4(j)

communication for a decision as to the security deposit to be

furnished by the fourth respondent. Exts.R4(g), R4(h) and R4(j)

documents would probabilise the case of the fourth respondent

that the agreement for the subject work could not be executed

by him on account of the doubt entertained by the officials of

the department as to the quantum of the security deposit to be

furnished by him. It is further seen that it was while Ext.R4(j)

request made by the second respondent before the

Government was pending consideration, the Government

issued Ext.R3(c) communication directing the department to

forfeit the earnest money deposit furnished by the fourth

respondent if he does not complete the formalities regarding

the execution of the agreement within seven days. As seen

from the materials on record, pursuant to the said direction, the

fourth respondent has furnished the security deposit in tune

with Ext.P6 communication. Of course, there was a delay of

nine days in complying with the direction contained in Ext.R3(c)

communication. In a case of this nature, as rightly contended

by the learned Senior Counsel for the fourth respondent, the

department is well within its power in granting enlargement of

time, and I do not, therefore, find any impropriety or illegality in

the stand taken by the department that they would have

entered into the necessary agreement with the fourth

respondent but for the interim order passed by this Court on

30.07.2021, especially when the petitioner has no case that the

stand aforesaid of the officials is vitiated by malice. I am

fortified in this view by the decision of the Apex Court in

Bharat Coking Coal Ltd. Paragraphs 46 and 47 of of the

said judgment read thus:

46. With regard to other allegations concerning condonation of Respondent 6's delay in producing guarantees, we would only

reiterate that there is no prohibition in law against public authorities granting relaxations for bona fide reasons. In Shobikaa Impex (P) Ltd. v. Central Medical Services Society, it has been noted that: (SCC p. 243, para 20)

"20. ... the State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It has been further held that the State, its corporations, instrumentalities and agencies have the 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 powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point."

47. Even if there had been a minor deviation from explicit terms of the NIT, it would not be sufficient by itself in the absence of mala fide for courts to set aside the tender at the behest of an unsuccessful bidder. This is because notice must be kept of the impact of overturning an executive decision and its impact on the larger public interest in the form of cost overruns or delays.

13. Be that as it may, in a case of this nature, of

course, the department would be well within its power to award

the work to the second highest bidder, if the highest bidder

does not furnish the security deposit and execute the

agreement within the time stipulated. But that does not mean

that the failure on the part of the highest bidder in furnishing

security deposit and executing the agreement within the time

stipulated would confer a right on the second highest bidder to

get the work awarded to him. In other words, even if there is

failure on the part of the highest bidder in furnishing security

deposit and executing the agreement on receipt of selection

notice, the same does not confer any right to the second

highest bidder to claim that the work shall be awarded to him.

Identical is the stand taken by this Court in Rajesh C. v.

District Collector, 2012 (2) KHC 185 and the Calcutta High

Court in Sarbangapur Fishermen's Co-operative Society

v. State of West Bengal, 2018 SCC Online Cal 8094. It is all

the more so since it is trite that the bidders participating in the

tender process have no right other than the right to equality

and fair treatment in the matter of evaluation of the

competitive bids offered by the interested persons in response

to notice inviting tenders in a transparent manner and free

from any hidden agenda [See Meerut Development

Authority v. Assn. of Management Studies, (2009) 6 SCC

171].

The writ petition, in the circumstances is without

merits and the same is, accordingly, dismissed.

Sd/-

P.B.SURESH KUMAR, JUDGE.

YKB




                  APPENDIX OF WP(C) 15259/2021

PETITIONER EXHIBITS
Exhibit P1             TRUE COPY OF E-TENDER NO.
                       03/EOI/2019/SE/ISC NOTICE DATED
                       01/01/2020 ISSUED BY THE 3RD
                       RESPONDENT.
Exhibit P2             TRUE COPY OF TERMS AND CONDITIONS AND
                       SCOPE OF THE WORK TO BE UNDERTAKEN BY
                       THE SUCCESSFUL BIDDER ISSUED BY THE 3RD
                       RESPONDENT ALONG WITH EXHIBIT P1.
Exhibit P3             TRUE COPY OF COMMUNICATION DATED
                       19/05/2020 ISSUED BY THE 1ST RESPONDENT
                       TO THE 2ND RESPONDENT.
Exhibit P4             TRUE COPY OF COMMUNICATION DATED
                       29/05/2020 ISSUED BY THE 2ND RESPONDENT
                       TO THE 3RD RESPONDENT.
Exhibit P5             TRUE COPY OF NOTICE OF SELECTION DATED
                       02/06/2020 ISSUED BY THE 3RD RESPONDENT
                       TO THE 4TH RESPONDENT.
Exhibit P6             TRUE COPY OF NOTICE DATED 30/10/2020
                       ISSUED BY THE 3RD RESPONDENT TO THE 4TH
                       RESPONDENT.
Exhibit P7             TRUE COPY OF REPRESENTATION DATED
                       11/02/2021 SUBMITTED BY THE PETITIONER
                       TO THE 3RD RESPONDENT.
Exhibit P8             TRUE COPY OF COMMUNICATION DATED
                       24/03/2021 3RD RESPONDENT ISSUED TO THE
                       PETITIONER.
Exhibit P9             TRUE COPY OF COMMUNICATION DATED
                       05/04/2021 TO THE 3RD RESPONDENT

INTIMATING ACCEPTANCE OF THE GOVERNMENT APPROVED RATE OF RS. 684/M3 FOR

EXECUTING THE WORK.

Exhibit P10 TRUE COPY OF COMMUNICATION DATED 24/03/2021 ISSUED BY THE 3RD RESPONDENT TO THE 4TH RESPONDENT INTIMATING REJECTION OF REQUEST TO PAY THE SECURITY DEPOSIT IN FIVE INSTALMENTS.

Exhibit P11 TRUE COPY OF REPRESENTATION DATED 31/05/2021 SUBMITTED BY THE PETITIONER BEFORE THE HON'BLE CHIEF MINISTER.

Exhibit P12 TRUE COPY OF COMMUNICATION DATED 05/07/2021 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.

RESPONDENTS EXHIBITS Exhibit R3(A) COPY OF THE LETTER DATED 21.10.2020 Exhibit R3(B) COPY OF THE LETTER DATED 30.10.2020 Exhibit R3(C) COPY OF THE GOVERNMENT LETTER DATED 14.07.2021 Exhibit R3(D) COPY OF THE LETTER DATED 14.07.2021 ISSUED BY 3RD RESPONDENT.

Exhibit R4(A) TRUE COPY OF THE LETTER VIDE NO.D6-

3911/2019/ISC DATED 29.01.2020 ISSUED BY THE 3RD RESPONDENT TO THE 2ND RESPONDENT ALONG WITH TYPED COPY Exhibit R4(B) TRUE COPY OF THE LETTER VIDE NO.W3-

38940/2019/EOI/DB DATED 14.02.2020 ISSUED BY THE 2ND RESPONDENT TO THE 4TH RESPONDENT Exhibit R4(C) TRUE COPY OF THE LETTER DATED 18.02.2020 SUBMITTED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT ALONG WITH TYPED COPY Exhibit R4(D) TRUE COPY OF THE THREE STAMP PAPERS

DATED 30.06.2020 IN THE NAME OF THE 4TH RESPONDENT.

Exhibit R4(E) TRUE COPY OF THE EMAIL DATED 25.09.2020 SENT BY THE 4TH RESPONDENT TO THE 3RD RESPONDENT.

Exhibit R4(F) TRUE COPY OF THE REPRESENTATION DATED 23.12.2020 SUBMITTED BY THE 4TH RESPONDENT BEFORE THE SUPERINTENDING ENGINEER.

Exhibit R4(G) TRUE COPY OF THE GOVERNMENT ORDER G.O(P)NO.7/2021/FIN DATED 07.01.2021.

Exhibit R4(H) TRUE COPY OF THE REPRESENTATION DATED 19.04.2021 SUBMITTED BY THE 4TH RESPONDENT BEFORE THE 3RD RESPONDENT.

Exhibit R4(I) TRUE COPY OF THE CLARIFICATION LETTER NO.D6-1911/2019/SE/ISC DATED 20.04.2021 ISSUED BY THE 3RD RESPONDENT TO THE 2ND RESPONDENT Exhibit R4(J) TRUE COPY OF THE COMMUNICATION VIDE NO.W3-38940/2019/EOI/DB-2 DATED 08.05.2021 FORWARDED BY THE 2ND RESPONDENT TO THE GOVERNMENT. TRUE COPY OF THE CLARIFICATION LETTER NO.D6-

1911/2019/SE/ISC DATED 20.04.2021 ISSUED BY THE 3RD RESPONDENT TO THE 2ND RESPONDENT Exhibit R4(K) TRUE COPY OF THE CLARIFICATION LETTER NO.D6-1911/2019/SE/ISC DATED 14.07.2021 ISSUED BY THE 3RD RESPONDENT TO THE 4TH RESPONDENT Exhibit R4(L) TRUE COPY OF THE LETTER DATED 19.07.2021 ISSUED BY THE 4TH RESPONDENT TO THE PRIVATE SECRETARY, IRRIGATION AND WATER RESOURCES.

Exhibit R4(M) TRUE COPY OF THE LETTER DATED 19.07.2021 ISSUED BY THE 4TH RESPONDENT TO THE 2ND RESPONDENT.

Exhibit R4(N) TRUE COPY OF THE TREASURY SAVING DEPOSIT CERTIFICATE VIDE NO.JL0404001 DATED 02.08.2021 OF THE SUB TREASURY, CHENGANOOR.

Exhibit R4(O) TRUE COPY OF THE LETTER OF THE STATE BANK OF INDIA DATED 03.08.2021 OFFERING BANK GUARANTEE WITHIN 2 DAYS.

Exhibit R4(P) TRUE COPY OF THE LETTER SUBMITTED BY THE 4TH RESPONDENT BEFORE THE 3RD RESPONDENT AND ITS ACKNOWLEDGMENT Exhibit R4(Q) TRUE COPY OF THE BANK GUARANTEE OFFERED BY THE STATE BANK OF INDIA ON 04.08.2021.

Exhibit R4(R) TRUE COPY OF THE EMAIL SENT BY THE PETITIONER HEREIN ADDRESSED TO THE RESPONDENTS 2 AND 3 ON 23.07.2021.