Ims Ship Management PVT. LTD. vs. The State Of Kerala
Original PDF →IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE N.NAGARESH MONDAY, THE 14TH DAY OF FEBRUARY 2022 / 25TH MAGHA, 1943 WP(C) NO. 3901 OF 2022 PETITIONER: IMS SHIP MANAGEMENT PVT. LTD., 401 REGENT CHAMBER., 4TH FLOOR, 208, JAMNALAL BAJAJ MARG, NARIMAN POINT, MUMBAI-400 021, REPRESENTED BY ITS MANAGING DIRECTOR PAVAN SATISH CHANDER SOOD. BY ADVS. S.SREEKUMAR (SR.) SUMAN CHAKRAVARTHY K.R.RIJA RESPONDENTS: 1 THE STATE OF KERALA, REPRESENTED BY THE SECRETARY, INDUSTRIES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2 KERALA STATE MINERAL DEVELOPMENT CORPORATION LIMITED (KEMDEL), REPRESENTED BY ITS MANAGING DIRECTOR, TC 26/954, "THE RETREAT", PLAMOODU, PATTOM PALACE P.O., THIRUVANANTHAPURAM-695 004. 3 THE CHAIRMAN, KERALA STATE MINERAL DEVELOPMENT CORPORATION LIMITED (KEMDEL), TC 26/954, "THE RETREAT", PLAMOODU, PATTOM PALACE P.O., THIRUVANANTHAPURAM-695 004. 4 THE MANAGING DIRECTOR, KERALA STATE MINERAL DEVELOPMENT CORPORATION LIMITED (KEMDEL), TC 26/954, "THE RETREAT", PLAMOODU, PATTOM PALACE P.O., THIRUVANANTHAPURAM-695 004. BY ADVS. BALAMURALI R.S. M.S.AMAL DHARSAN(K/728/2015) SRI.APPU P.S., GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.02.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C)No.3901/22 2 JUDGMENT Dated this the 14th day of February, 2022 The petitioner, a Company engaged in dredging and removal of the silt (de-silting) from water bodies, has approached this Court seeking to declare that Ext.P6 is not liable to be cancelled and to declare that the time stipulated in Ext.P1 is not liable to be reduced to 12 months from original 36 months and that respondents 2 to 4 are not authorised to do so after the bid is finalised.
The 2nd respondent-Kerala State Mineral Development Corporation Limited (KEMDEL) floated Ext.P1 NIT on 17.02.2021 for the work “Restoration of storage capacity of Walayar Dam Reservoir by removing silt and silt mixed with sand and clay by means of Pneumatic suction
WP(C)No.3901/22 3 pumps and thereafter separating them individually into separate stacks in measurable form”. The petitioner submitted bid in response to Ext.P1. The respondents invited the petitioner for further negotiations. By Ext.P4 letter dated 26.07.2021, the petitioner agreed to do the work at a revised rate of ₹540/- Cubic Metre (GST to be paid extra).
The petitioner states that the respondents accepted the revised rate as is evidenced by Ext.P5. The petitioner was issued with Ext.P6 Selection Notice dated 24.09.2021 also. In Ext.P6, it was stated that the work should be completed in all respects within a specified time from the date of handing over of the site. The petitioner states that in Ext.P1, it was specifically stated that the period of completion of work is 36 months.
Thereafter, the respondents issued Ext.P7 draft agreement. Clause 6 of the draft agreement stated that the contractor is bound to complete the work within 12 months.
WP(C)No.3901/22 4 The said period of 12 months was a major departure from Ext.P1 NIT. The petitioner, thereupon, submitted Ext.P8 letter to the Managing Director, KEMDEL stating that 36 months is the time granted as per Ext.P1 and within the 12 months period as contained in Ext.P7 draft agreement, it will not be humanly possible to complete the de-siltation work of the Dam.
The 4th respondent, thereafter, invited the petitioner for a meeting. Ext.P10 minutes of the meeting held on 18.10.2021 would indicate that the respondent offered the petitioner to accept the 12 months period on condition that extension of period to complete the work can be considered depending upon the progress of the work.
The petitioner, thereafter, sent Ext.P11 letter to the Managing Director, KEMDEL pointing out that in the 12 months period, the petitioner will be able to show only 15- 20% progress and will be able to complete only procurement
WP(C)No.3901/22 5 of equipments as well as mobilisation. Only about 6 to 7 months will be available for dredging and separation. It is not humanly possible to complete the work within that time. The respondents, however, issued Ext.P12 letter dated 28.10.2021 to the petitioner requiring the petitioner to execute the agreement on or before 10.11.2021. 7. The petitioner again sent Ext.P13 letter to the Chairman, KEMDEL pointing out that Clause 6 of the proposed agreement mentions that the department may consider an extension of time period but the extension is subject to fulfillment of various conditions and also subject to the approval of the Government of Kerala. The petitioner stated that such extensions, even if granted, may take a considerable amount of time, which will either stall the project till the extension arrives or the petitioner will be forced to continue without having a valid extension. This will be a risky proposition. In spite of the concerns raised by the petitioner,
WP(C)No.3901/22 6 the KEMDEL issued Ext.P14 letter dated 26.11.2021, again requiring the petitioner to enter into agreement on or before 10.12.2021, failing which necessary action will be taken to cancel the selection notice.
The petitioner again requested the respondent as per Ext.P15 dated 02.01.2022 to grant the petitioner 36 months contract period so that the petitioner can proceed with further formalities of signing the agreement. To the surprise and predicament of the petitioner, the respondents issued Ext.P16 communication cancelling the selection notice for Dam de-siltation work at Walayar Dam. The respondents issued Ext.P19 fresh NIT also on 15.01.2022. 9. The petitioner submits that reduction of period of completion of work and the cancellation of the selection notice were pursuant to Ext.P20 Government Order dated 31.08.2021. Ext.P20 Government Order mandated that the agreement entered into by the respondents should be subject
WP(C)No.3901/22 7 to the condition that the entire de-siltation process should be completed within 12 months.
The learned Senior Counsel assisted by the counsel for the petitioner argued that relying on Ext.P1, the petitioner had made to their offer. At the instance of the respondents, the petitioner entered into negotiation with the respondents and has considerably reduced the rates originally offered by the petitioner. The petitioner was issued with Ext.P6 selection notice also anticipating the grant of contract of the petitioner. The petitioner has invested huge amounts for procurement of men and machinery. A land has been taken on giving a high lease amount, to execute the work. After negotiating with the petitioner and after issuing a selection notice and after forcing the petitioner to invest substantial amount to prosecute the work, the respondents cannot unilaterally cancel the selection notice.
WP(C)No.3901/22 8
The learned Senior Counsel further pointed out that the de-siltation work of Walayar Dam is a substantial work and it will be not possible to complete the work within 12 months. The respondents are forcing the petitioner to do a work which is humanly impossible. The learned counsel for the petitioner further urged that after having negotiation with the petitioner and after getting an offer of reduced rate from the petitioner and also after issuing a selection notice, the respondents are estopped from going back. By investing huge amounts, the petitioner has changed its position relying on the representation and selection notice of the respondents. The respondents, therefore, cannot cancel the selection notice.
The learned counsel for the petitioner relying on the judgment in Ramana Dayaram Shetty v. International Airport Authority of India [AIR 1979 SC 1628], argued that the Hon'ble Apex Court has held that where the Government
WP(C)No.3901/22 9 is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The conduct of the respondents is contrary to the law laid down by the Apex Court, contended the learned Senior Counsel.
The learned Senior Counsel further pointed out that Clause 33 of General Terms and Conditions appended to Ext.P1 reads that KEMDEL, the employer, reserves the right to accept or reject any bid and to annul the bidding process and reject all bids at any time before contract award, without there by incurring any liability to bidders. The learned Senior Counsel argued that in case of annulment, all bids submitted and the bid security shall be promptly returned to the bidders.
WP(C)No.3901/22 10
The learned Standing Counsel for respondents 2 to 4 entered appearance and contested the writ petition. It was submitted on behalf of respondents 2 to 4 that Ext.R2(a) Government Order dated 07.01.2021 was issued by the Water Resources Department of Government of Kerala giving in-principle approval to KEMDEL for de-siltation work of Walayar Dam. Subsequently, Ext.R2(d) Government Order was issued on 31.08.2021. In Ext.R2(d) Government Order, the Government considered the decision of the High Level Empowered Committee and approved the revenue sharing pattern with the KEMDEL, for the de-siltation of Meenkara and Walayar Dams. In Ext.R2(d) Government Order, it was specifically stated that the entire de-siltation process should be completed within 12 months.
The learned Standing Counsel for respondents 2 to 4 urged that de-siltation work has to be conducted in a time bound manner. The High Level Empowered Committee
WP(C)No.3901/22 11 consisting of experts considered the issue and came to a conclusion that prolonging the de-siltation beyond 12 months would make unnecessary burden on the State Exchequer as after that period, further siltation will take place. Therefore, de-siltation work should be completed within a period of 12 months. It was based on the decision of the High Level Empowered Committee that the Government put a condition that the entire de-siltation process should be completed within 12 months. Such insistence was in public interest and in the larger interest of the public Exchequer.
The learned Standing Counsel pointed out that inspite of reduction of period of completion of work for 12 months in respect of Meenkara Dam, the successful bidder there has agreed to complete the work within 12 months period. The petitioner was also a bidder in the contract of de- siltation of Meenkara Dam. The petitioner could have very well entered into an agreement with respondents 2 to 4, in
WP(C)No.3901/22 12 respect of the de-siltation in Walayar, based on Ext.P7 draft agreement. In the unlikely event of petitioner being not able to complete the work within the 12 months period, respondents 2 to 4 would have considered petitioner's application for extension of the period, depending upon the progress of the work.
In spite of repeated request made by respondents 2 to 4, the petitioner did not come forward to execute agreement in Ext.P7 form. It was in such circumstances that respondents 2 to 4 cancelled Ext.P6 selection notice issued to the petitioner and decided to re-tender the work. There is no illegality whatsoever in the action of respondents 2 to 4. The learned Government Pleader also supported the contentions of respondents 2 to 4. 18. The learned Government Pleader pointed out that an Expert Committee / High Level Empowered Committee on de-siltation considered the entire aspect of the case. The
WP(C)No.3901/22 13 High Level Empowered Committee was of the firm opinion that the de-siltation work of Dam should be completed within 12 months. Prolonging the period spreading over to more than one year will cause further siltation of Dams and will cause considerable loss to the public Exchequer.
The learned Government Pleader pointed out that the petitioner was given a letter on 03.12.2021 by the 2nd respondent in which it was offered that if the petitioner shows progress in the work undertaken by him, the period can be extended, in the event the petitioner is not able to finish the work within 24 months. The floods are occurring in Kerala frequently. Unless the de-siltation work is completed within 12 months, any flood that may occur would further burden the Dam with siltation.
The learned Government Pleader pointed out that the respondents after issuing notice to the petitioner waited for more than three months and only thereafter that the
WP(C)No.3901/22 14 selection notice was cancelled and re-tender was ordered. The learned Government Pleader also pointed out that in respect of de-siltation work in Meenkara Dam, contractor there had undertaken to complete the de-siltation within 12 months.
I have heard the learned counsel for the petitioner, the learned Government Pleader representing the 1st respondent and the learned Standing Counsel representing respondents 2 to 4. 22. The work offered to the petitioner pursuant to Ext.P1 was restoration of storage capacity of Walayar Dam Reservoir by removing silt and silt mixed with sand and clay. In Ext.P1, the period of completion of work was stipulated as 36 months. The petitioner made its bid and negotiation were held. The petitioner offered to execute the work on a reduced rate of ₹540/- Cubic Metre. Based on that, Ext.P6 selection notice was issued.
WP(C)No.3901/22 15
It was in the meanwhile, on the basis of recommendations of High Level Empowered Committee that the Government of Kerala issued Ext.P20 Government Order stipulating that the petitioner should remit 1/12th of the income of each month to the Reservoir Maintenance Fund of Irrigation Department and the de-siltation process should be completed within 12 months. This Government Order forced respondents 2 to 4 to reduce the period of work from 36 months to 12 months. The decision of the Government of Kerala as contained in Ext.P20 was based on the meeting of the High Level Empowered Committee on de-siltation held on 01.07.2021. The decision appears to be in public interest. If any de-siltation work is beyond 12 months period, there is a strong likelihood of further siltation occurring in the Dam, which will further burden the State Exchequer. Therefore, the Government decided that the de-siltation work being entrusted to be carried out under the KEMDEL should be
WP(C)No.3901/22 16 limited to 12 months. It is based on Ext.P20 Government Order that respondents 2 to 4 drafted Ext.P7 draft agreement.
It is true that the petitioner has responded to Ext.P1 NIT, which stated that the period of completion of works is 36 months. Negotiations were also held and selection notice was also issued. However, no agreement was executed. There occurred a difference of opinion as to the period of completion of the work between the petitioner and respondents 2 to 4. The repeated request of respondents 2 to 4 to execute agreement as per Ext.P7 draft agreement was not acceptable to the petitioner-Company. It was in such circumstances that respondents 2 to 4 cancelled the selection notice issued to the petitioner and decided to re-tender the work.
This Court is of the firm view that the participation of the petitioner pursuant to Ext.P1 NIT in the tender
WP(C)No.3901/22 17 proceedings and issuance of Ext.P6 selection notice to the petitioner by itself will not confer any right on the petitioner to have the contract. The employer is at liberty to change the conditions in the NIT appropriately, if circumstances so warrant. In the present case, respondents 2 to 4 had to change the condition as the period of completion of work based on a Government Order issued which in turn was following a decision of High Level Empowered Committee. As long as the petitioner has not executed any agreement with respondents 2 to 4, the petitioner cannot be heard to contend that the petitioner should be permitted to execute the work as per the provisions contained in Ext.P1 NIT. In the afore circumstances, this Court finds no merit in the writ petition. The writ petition is accordingly dismissed. N. NAGARESH JUDGE SR
WP(C)No.3901/22 18 APPENDIX OF WP(C) 3901/2022 PETITIONER'S EXHIBITS: Exhibit P1OF THE NOTICE INVITING TENDER DATED 17.02.2021. Exhibit P2OF THE LETTER REQUESTING A REVISED QUOTE DATED 20.07.2021. Exhibit P3 AOF THE COMMUNICATION DATED 23.07.2021. Exhibit P4 AOF THE LETTER SUBMITTING A REVISED QUOTE DATED 26.07. 21. Exhibit P5OF THE COMMUNICATION DATED 17.09.21 ACCEPTING REVISED RATE. Exhibit P6OF THE SELECTION NOTICE DATED 24.09.2021. Exhibit P7OF THE DRAFT AGREEMENT DATED NIL. Exhibit P8OF THE MAIL SEEKING CLARIFICATION DATED 07.10. 21. Exhibit P9OF THE EMAIL COMMUNICATION IN THIS REGARD DATED 10.10.2020(2021). Exhibit P10OF THE MINUTES DATED 18.10.2021 RECEIVED THROUGH E MAIL. Exhibit P11OF THE LETTER DATED 26.10.2021 ADDRESSED TO THE 4TH RESPONDENT. Exhibit P12OF THE COMMUNICATION DATED 28.10.2021 BY THE 2ND RESPONDENT. Exhibit P13OF THE LETTER DATED 10.11.2021. Exhibit P14OF THE LETTER DATED 26.11.2021 ISSUED BY THE 4TH RESPONDENT. Exhibit P15OF THE LETTER DATED 02.01.2022 ADDRESSED TO THE 3RD RESPONDENT. Exhibit P16OF THE LETTER DATED 13.01.22 ISSUED BY THE 4TH RESPONDENT CANCELLING EXT.P6. WP(C)No.3901/22 19 Exhibit P17OF THE LETTER DATED 17.01.22 ADDRESSED TO THE 3RD RESPONDENT. Exhibit P18OF THE LETTER DATED 21.1.2022 ISSUED BY THE 4TH RESPONDENT CANCELLING EXT.P6. Exhibit P19OF THE NOTICE INVITING RE TENDER DATED 15.01.2022. Exhibit P20OF GOVERNMENT ORDER G.O.(RT) NO.436/2021/WRD DATED 31/8/2021 RESPONDENTS' EXHIBITS: Exhibit R2(a)OF THE G.O.(RT.) No.22/2021/WRD DATED 07.01.2021 Exhibit R2(b)OF THE E-MAIL COMMUNICATED DATED 12.03.2021 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit R2(c)OF THE E-MAIL COMMUNICATION DATED 05.07.2021 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT. Exhibit R2(d)OF THE G.O. (RT.)NO.436/2021/WRD DATED 31.08.2021 Exhibit R2(e)OF THE AGREEMENT DATED 19.01.2022 ENTERED WITH RESPECT TO DE- SILTATION OF MEENKARA DAM. SR
Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.