Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY TUESDAY, THE 8TH DAY OF NOVEMBER 2022 / 17TH KARTHIKA, 1944 WA NO. 1380 OF 2022 AGAINST THE JUDGMENT WP(C) 28351/2022 OF HIGH COURT OF KERALA APPELLANT/S:
P.SHYAM RAJU, AGED 58 YEARS S/O PADMANABHAN, PROPRIETOR, SKILDERZ DEVELOPERS, RESIDING AT ARJUNAM 27/355, THIRUVAMPADY.P.O, ALAPPUZHA, PIN-688002.
BY ADVS.
K.JAJU BABU (SR.)(K/116/1981) K.V.SREEVINAYAKAN K.M.MUHAMMED HUSSAIN(K/147/2011) COLIN ALEX RESPONDENT/S:
1 KERALA MINERALS AND METALS LIMITED SANKARAMANGALAM, CHAVARA, KOLLAM, KERALA-691583,REPRESENTED BY ITS MANAGING DIRECTOR.
2 THE MANAGING DIRECTOR, KERALA MINERAL AND METALS LTD, SANKARAMANGALAM, CHAVARA, KOLLAM, KERALA-691583.
3 DEEPTHI TRANSPORT SERVICES, IRE ROAD, VADAKADAM BUILDING, KARITHURA, CHAVARA.P.O, KOLLAM, PIN-691583.
BY ADVS.
K. ANAND (SR.)
LATHA ANAND NANDAGOPAL NAMBIAR V.V CHITRA JOHNSON(K/000924/2018) SMITHA (EZHUPUNNA)(K/223/2015) M.N.RADHAKRISHNA MENON S.VISHNU (ARIKKATTIL) THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08.11.2022, ALONG WITH WA.1396/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W. A. Nos. 1380 & 1396 of 2022 -2- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY TUESDAY, THE 8TH DAY OF NOVEMBER 2022 / 17TH KARTHIKA, 1944 WA NO. 1396 OF 2022 AGAINST THE JUDGMENTWP(C) 27223/2022 OF HIGH COURT OF KERALA APPELLANT/S:
P.SHYAM RAJU, AGED 58 YEARS S/O PADMANABHAN, PROPRIETOR, SKILDERZ DEVELOPERS, RESIDING AT ARJUNAM 27/355, THIRUVAMPADY P.O, ALAPPUZHA, PIN-688002.
BY ADVS.
JAJU BABU (SR.)
K.V.SREE VINAYAKAN K.M.MUHAMMED HUSSAIN COLIN ALEX RESPONDENT/S:
1 THE KERALA MINERALS AND METALS LTD., SANKARAMANGALAM, CHAVARA, KOLLAM, KERALA, 691583, REPRESENTED BY ITS MANAGING DIRECTOR.
2 THE MANAGING DIRECTOR, KERALA MINERAL AND METALS LTD, SANKARAMANGALAM, CHAVARA, KOLLAM, KERALA, 691583.
BY ADVS.
K. ANAND (SR.)
LATHA ANAND M.N.RADHAKRISHNA MENON S.VISHNU (ARIKKATTIL) THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08.11.2022, ALONG WITH WA.1380/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W. A. Nos. 1380 & 1396 of 2022 -3- J U D G M E N T S. Manikumar, C. J.
Being aggrieved by the judgment dated 01.09.2022 in W. P. (C) No. 28351 of 2022 and judgment dated 24.08.2022 in W. P. (C) No.
27223 of 2022, instant W. A. Nos. 1380/2022 and 1396/2022 respectively, have been filed.
2. On 22.09.2022, when the writ appeals came up for admission, we passed the following order:- “2. Before the writ court, in W.P.(C) No.27223/2022, petitioner has sought for the following reliefs:
(1) Issue a Writ in the nature of Mandamus or other writ, order or direction directing the respondents to cancel the Exhibit P2 tender and order a re-tender.
(2) Issue a Writ of Certiorari or other Writ, order or direction calling for the records leading to the bid of the 3rd respondent.
(3) To dispense with filing of the translation of Vernacular Documents.
(4) Allow the Writ petition with costs.
(5) Grant such other further reliefs which this Hon'ble Court may be pleased to direct in the facts and circumstances of the case.
3. Short facts leading to the filing of W.P.(C) No.27223/2022, are as under:
W. A. Nos. 1380 & 1396 of 2022 -4- 4. According to the appellant, he had participated in Exhibit P2 tender floated by the Kerala Mineral and Metals Limited, Kollam – 1st respondent and he is executing Exhibit P3 ongoing work similar to the work covered by Exhibit P2 tender.
While submitting tenders pursuant to Exhibit P2, the Appellant produced Solvency of Rs.1.50 Crores instead of Rs.1.85 Crores due to an inadvertent omission, as for Exhibit P2 work the Solvency Certificate sought was only for Rs.1.5 Crores.
5. According to the appellant, though the Appellant furnished Exhibit P5 Solvency Certificate of Rs.2 Crores through Exhibit P6 letter after detecting the mistake, the respondents refused to consider it for the sole purpose of granting the tender to the remaining sole tenderer and the same was not considered.
6. It is stated by the appellant that he quoted Rs.
314/MT+GST, while the single tender quoted Rs.369/- MT+GST. As per Annexure A2 CVC guidelines regarding the single tender, the work order cannot be issued to the single tender. According to the appellant, the revised CVC guidelines specifically stipulates that Re-Tender can be resorted to; (1) The procurement was satisfactorily advertised and sufficient time was given for submission of bids (ii) The qualification criteria was not unduly restrictive le conditions were stringent and rigid and (iii) The process are reasonable in comparison to market values ie if it causes huge financial loss. In the present case all these conditions are existent.
7. According to the appellant, as far as condition (i) is concerned, only 7 days were granted to submit bids, while in the
W. A. Nos. 1380 & 1396 of 2022 -5- Original Tender, 21 days were granted. As regards the second criteria is concerned, the Solvency Certificate for 1.5 lakh Tonnes and 75% extra work was stipulated as Rs.1.5 crores. But in the present tender, the quantity is reduced to 1 Lakh Tonnes, but the amount of Solvency demanded is Rs. 1.85 Crores. This was done to restrict the bidders as much time would be consumed to obtain Solvency Certificate successively. The third condition would result in loss of Rs 55 lakhs on a modest estimate and the loss could go upto Rs 80 Crores. Thus, the procedure being adopted by the 1st respondent is in violation of CVC guidelines, which has the force of law. It is in this backgrounds, W.P.(C) No.27223/2022 was filed and the writ court vide judgment dated 24.8.2022 in W.P.(C) No.27223/2022, dismissed the writ petition.
8. Before the writ court, in W.P.© No.28351/2022, petitioner has sought for the following reliefs:
(1) Issue a Writ in the nature of Mandamus or other writ, order or direction directing the respondents to cancel the Exhibit P2 tender and order a re-tender.
(2) Issue a Writ of Certiorari or other Writ, order or direction calling for the records leading to the bid of the 3rd respondent.
(3) To dispense with filing of the translation of Vernacular Documents.
(4) Allow the Writ petition with costs.
(5) Grant such other further reliefs which this Hon'ble Court may be pleased to direct in the facts and circumstances of the case.
W. A. Nos. 1380 & 1396 of 2022 -6- 9. Short facts leading to the filing of W. A. No. 1380 of 2022 are as follows:
10. According to the appellant, he had participated in Exhibit P2 tender floated by the Kerala Mineral and Metals Limited, Kollam – 1st respondent and he is executing Exhibit P3 ongoing work similar to the work covered by Exhibit P2 tender.
While submitting tenders pursuant to Exhibit P2, the Appellant produced Solvency of Rs.1.50 Crores instead of Rs.1.85 Crores due to an inadvertent omission, as for Exhibit P2 work the Solvency Certificate sought was only for Rs.1.5 Crores.
11. It is stated by the appellant that, though he furnished Exhibit P5 Solvency Certificate of Rs.2 Crores through Exhibit P6 letter after detecting the mistake, the respondents refused to consider it for the sole purpose of granting the tender to the remaining sole tenderer. According to the appellant, he quoted Rs. 314/MT+GST, while the 3rd respondent viz., M/s.Deepthi Transport Service quoted Rs. 369/- MT+GST. As per Annexure A2 CVC guidelines regarding the single tender, the work order cannot be issued to the 3rd respondent. The revised CVC guidelines specifically stipulates that Re-Tender can be resorted to; (i) the procurement was satisfactorily advertised and sufficient time was given for submission of bids (ii) the qualification criteria was not unduly restrictive le conditions were stringent and rigid and (iii) the process are reasonable in comparison to market values ie if it causes huge financial loss. In the present case all these conditions are existent.
W. A. Nos. 1380 & 1396 of 2022 -7- 12. According to the appellant, as far as condition (1) is concerned, only 7 days were granted to submit bids, while in the original tender, 21 days were granted. As regards the second criteria is concerned, the Solvency Certificate for 1.5 laks Tonnes and 75% extra work was stipulated as Rs.1.5 crores. But in the present tender, the quantity is reduced to 1 Lakh Tonnes, but the amount of Solvency demanded is Rs. 1.85 Crores. This was done to restrict the bidders as much time would be consumed to obtain Solvency Certificate successively. The third condition would result in loss of Rs 55 lakhs on a modest estimate and the loss could go upto Rs 80 Crores. Thus, according to the appellant, the procedure being adopted by the respondent is in violation of CVC guidelines, which has the force of law. It is in this backgrounds, W.P.(C) No.28351/2022 was filed and the writ court vide judgment dated 01.09.2022 in W.P.(C) No.28351/2022, dismissed the writ petition.
13. After considering the submissions and clause 4.3 of the tender notification, writ court, vide judgment dated 24.8.2022 in W.P.© No.27223/2022, declined to grant the reliefs sought for by the appellant/writ petitioner.
14. in W.P.© No.27223/2022, clause 4.3 of the tender notice referred to reads thus:
“4.3 The tender shall be solvent to the tune of minimum Rs. 1.8 Cr. The solvency certificate issued date shall not be more than 12 months prior to the date of the tender submission end date ( of this tender) and it shall be issued by a scheduled bank registered in India and the same shall only be in the format enclosed with this tender form as Annexure-I”
W. A. Nos. 1380 & 1396 of 2022 -8- 15. Earlier, when the petitioner challenged the judgment of the writ court in W.P.© No.28351/2022 dated 1.9.2022, we recorded the submission of Mr.Nandagopal Nambiar – learned counsel appearing for M/s.Deepthi Transport Service - 3rd respondent, that the work has already commenced from 6.9.2022.” 3. Instant writ appeals are filed on the ground inter alia that the learned Single Judge omitted to consider the fact that as per clause 5.6.7 of the CVC guidelines, in the matter of a single bid, if the prices are not reasonable compared to the market value, the tender notice can be cancelled and that the work can be retendered. The price quoted by M/s. Deepthi Transport Service, Kollam, the 3rd respondent in W. A.
No. 1380 of 2022, is highly exorbitant and unreasonable. The rate quoted by the 3rd respondent is Rs.369/MT & GST, whereas, the rate quoted by the appellant is Rs.314/MT & GST.
4. The appellant has a specific case that if the bid of the 3rd respondent is accepted by rejecting the bid of the appellant, there will be loss of approximately Rs. 55 lakhs to the Kerala Minerals and Metals Ltd., the 1st respondent, and the loss would mount if 50% more quantity of earth is to be removed as instructed.
W. A. Nos. 1380 & 1396 of 2022 -9- 5. Appellant has contended that the learned Single Judge ought to have held that the act of the Kerala Minerals and Metals Ltd.
Kollam, the 1st respondent, in the proceedings with Ext. P2 tender, is illegal and clear example of malpractices and violation of guidelines provided in Central Vigilance Manual, as the tender submitted by the 3rd respondent is a single tender. If the conduct of respondents can be taken as an indication, the 1st respondent was manipulating the tender process, so as to accommodate the 3rd respondent, by excluding the appellant and another bidder on technical ground.
6. Appellant has further contended that the rate quoted by the 3rd respondent is Rs.369/MT & GST whereas the rate quoted by the appellant is Rs.314/MT & GST. The ongoing Ext. P2 work of the appellant is being performed at Rs. 324/MT & GST. Comparing the rate quoted by the appellant with the rate offered by 3rd respondent in Ext. P4 tender, the loss to the 1st respondent company would be Rs.55 Lakhs. If the rate quoted by the appellant for the ongoing Ext. P2 work is compared to the rate quoted by the appellant, the 1st respondent company would suffer a loss of Rs.45 Lakhs for 1 Lakh Tonnes. Thus, it is evident that approving the single tender of the 3rd respondent would result in huge loss to the 1st respondent.
W. A. Nos. 1380 & 1396 of 2022 -10- 7. It is further contended that this situation was created by the 1st respondent by adopting a very stringent and rigid stand regarding the Solvency Certificate. The substituted Solvency Certificate offered by the appellant was refused to be considered by the 1st respondent. The CVC guidelines in this regard is very clear with respect to single tenders. The CVC guidelines prescribes a re-tender in the event of a single tender unless the 3 exceptions contained in the revised guidelines are made out. The revised CVC guidelines specifically stipulates that re-tender can be resorted to (i) if the conditions were stringent and rigid and (ii) if it causes huge financial loss. In the present case both these conditions are existent. Thus the procedure being adopted by the 1st respondent is in violation of CVC guidelines, which has the force of law.
8. It is also contended that in Tender ID 2021 KMML 425037_1 and in Tender ID 2020 KMML_374691_1, short fall notices were issued to the tenderers to submit insufficient and defective documents including solvency certificate. This procedure has been violated in Ext.
P2 tender, which demonstrates the malafides and bias in the tender process.
W. A. Nos. 1380 & 1396 of 2022 -11- 9. When the writ appeals came up for hearing, Mr. V. V.
Nandagopal Nambiar, learned counsel for M/s. Deepthi Transport Service, the 3rd respondent in W. A. No. 1380 of 2022, submitted that work has been commenced, and a substantial portion of the sand has already been removed, thus contending that a contract has been executed, in terms of the tender conditions, and work commenced.
10. Mr. Jaju Babu, learned Senior Counsel appearing for the appellant, fairly submitted that though the last date fixed for submission of the solvency certificate was on 12.08.2022, appellant submitted the certificate only on 17.08.2022, and the issue to be considered is whether belated submission of solvency certificate should be accepted.
11. Admittedly, solvency certificate, as required under the tender conditions, has been submitted beyond the period provided therefor, in the tender.
12. On the facts and circumstances of the case, we are of the view that the tender conditions cannot be altered, unless and until it is per se illegal. Prima facie, we do not find any reason to hold otherwise.
As per the tender conditions, solvency certificate should be submitted
W. A. Nos. 1380 & 1396 of 2022 -12- before the last date fixed. We sustain the decision, on the aspect of disqualification.
13. Accordingly, W. A. No. 1396/2022 is dismissed.
14. Consequently, W.A. No.1380/2022 is also liable to be dismissed.
For the reasons stated above, we are not inclined to interfere with the impugned judgment of the learned Single Judge in W. P. (C) No. 28351/2022.
Accordingly, W. A. No. 1380/2022 is also dismissed.
Sd/- S. MANIKUMAR CHIEF JUSTICE
Sd/- SHAJI P. CHALY JUDGE Eb ///TRUE COPY/// P. A. TO JUDGE
W. A. Nos. 1380 & 1396 of 2022 -13- APPENDIX OF WA 1380/2022 PETITIONER ANNEXURES Annexure A1 TRUE COPY OF THE TENDER NOTIFICATION DATED 5-8-2022 ISSUED BY THE 1ST RESPONDENT.
Annexure A2 THE RELEVANT PAGES OF THE CVC GUIDELINES UPDATED IN JUNE 2022 Annexure A3 TRUE COPY OF THE LETTER DATED 12-09-2022 ISSUED BY PURAKKAD GRAMA PANCHAYAT TO THE 2ND RESPONDENT ALONG WITH ENGLISH TRANSLATION.
Annexure A4 TRUE COPY OF THE TENDER NOTICE WITH RESPECT TO TENDER NO.
KMML/MS/TPLY/14/2022- 23 DATED 05-07- 2022 ISSUED BY THE LST RESPONDENT Annexure A5 TRUE COPY OF THE TENDER NOTICE WITH RESPECT TO TENDER NO.
KMML/MS/TPILY/15/2022-23 DATED 16-07- 2022 ISSUED BY THE LST RESPONDENT
W. A. Nos. 1380 & 1396 of 2022 -14- APPENDIX OF WA 1396/2022 PETITIONER ANNEXURES Annexure A1 TRUE COPY OF THE TENDER NOTIFICATION DATED 5-8-2022 ISSUED BY THE 1ST RESPONDENT.
Annexure A2 THE RELEVANT PAGES OF THE CVC GUIDELINES UPDATED IN JUNE 2022.
Annexure A3 TRUE COPY OF THE LETTER DATED 12-092022 ISSUED BY PURAKKAD GRAMA PANCHAYAT TO THE 2ND RESPONDENT WITH ENGLISH TRANSLATION.
Annexure A4 TRUE COPY OF THE TENDER NOTICE WITH RESPECT TO TENDER NO.
KMML/MSITPLY/14/2022- 23 DATED 05-07- 2022 ISSUED BY THE LST RESPONDENT Annexure A5 TRUE COPY OF THE TENDER NOTICE WITH RESPECT TO TENDER NO.
KMML/MSITPLY/15/2022-23 DATED 16-07-2022 ISSUED BY THE LST RESPONDENT