B. Sundaram vs. State Of Kerala

The petitioner responded to a tender floated by the 2nd respondent for the work of highly mechanised collection, loading and transportation of mineral sand in tippers (Rear Dump Trucks) from North/South side of Thottappalli Spillway Channel and Pozhi mouth site to the premises of KMML and IREL, Chavara. The petitioner turned out to be the lowest tenderer (L1). The petitioner quoted 9% GST. One Shyam Raj was the second lowest tenderer. The respondents accepted the tender submitted by the petitioner.

The said Shyam Raj filed W.P.(C) No.14171/2021 seeking to restrain the respondents from awarding the tender in favour of the petitioner. There is no interim order in the said writ petition. However, the respondents did not issue any work order to the petitioner. Instead, the respondents required the petitioner as per Ext.P2 to submit a declaration for acceptance of 9% discount and claiming only 9% GST from KMML. The petitioner submitted a reply conveying his acceptance to perform the work at a discount of 9% but denied to claim mere 9% GST from the 2nd respondent.

Thereupon, the 2nd respondent issued a fresh e- tender for the same work. W.P.(C) No.14171/2021 filed by the said Shyam Raj was dismissed on 11.08.2021 as per Ext.P4 judgment. Thereafter, the 2nd respondent issued Ext.P5 work order on 13.08.2021 to the petitioner. By this time, the period of validity of the tender submitted by the petitioner was expired and the petitioner submitted Ext.P6 letter pointing out this fact. On receipt of Ext.P6, the 2nd respondent issued a show-cause notice proposing to blacklist

The petitioner contended that Ext.P9 has been issued ignoring Clause 8 of the tender document which states that the tenders submitted by the tenderers shall remin valid for acceptance for period of 30 days from the date of opening of the tender. The petitioner pointed out that though a third party filed a writ petition, there was no interim order and nothing prevented the respondents from issuing work order. Instead of issuing work order, the 2nd respondent issued fresh e-tender and awarded the work to a third party. In view of Clause 9.7 of Ext.P1 tender, the respondents were liable to pay actual GST prevailing at the time of billing to the petitioner. Therefore, Ext.P9 order is illegal and unsustainable.

Respondents 2 and 3 contested the writ petition filing counter affidavit. Respondents 2 and 3 pointed out that the petitioner had quoted 9% GST and the L2 tenderer had quoted 18% GST. The award of work to the petitioner was challenged by the said L2 filing W.P.(C) No.14171/2021. In the judgment in W.P.(C) No.14171/2021, this Court held that if a tenderer does not show correctly the applicable taxes in the tender, no further claim can be raised by him at a later stage under any circumstances. The said finding of this Court is binding on the petitioner. Therefore, the petitioner cannot take advantage of the fact that he did not accept the work order because 18% GST was not allowed by respondents 2 and 3. 7. Respondents 2 and 3 further submitted that the petitioner had made an offer to undertake the work for 300.29 per Metric Tonne and 9% GST. The petitioner cannot later turn around and make claim which is inconsistent with the conditions in his bid. The aforesaid conduct of the petitioner made him an undesirable bidder. It is in such circumstances that the petitioner has been blacklisted. The blacklisting is

The learned Standing Counsel for respondents 2 and 3 further pointed out that the work awarded was of an urgent nature and it had to be executed with promptitude. Instead, the petitioner tried to hold the 2nd respondent to ransom and obtain the work for the amount quoted by him. Therefore, the action of the respondents in forfeiting the EMD and debarring the petitioner from further tender for a period of six months cannot be said to be illegal or arbitrary.

The learned Standing Counsel for respondents 2 and 3 relied on the judgment of the Hon'ble Apex Court in Patel Engineering Limited v. Union of India and others [(2012) 11 SCC 257], wherein the Hon'ble Apex Court held that the State can decline to enter into a contractual relationship with a person or a class of persons for a legitimate purpose. The authority of State to blacklist a person is a necessary concomitant to the executive power of the State to carry on trade or business and making of contracts for any purpose. There need not be any statutory

I have heard the learned counsel for the petitioner, the learned Standing Counsel representing respondents 2 and 3 and the learned Government Pleader representing the 1st respondent.

The petitioner was L1 bidder among those who responded to Ext.P1 notice inviting tender dated 07.06.2021. When the bid in favour of the petitioner was to be confirmed by issuing work order, the second lowest tenderer approached this Court filing W.P.(C) No.14171/2021. The petitioner in the said writ petition contended that the amount quoted by the petitioner with 18% GST was lower than the amount quoted by the petitioner herein with 9% GST. In the said writ petition, a learned Single Judge of this Court considered the matter and held that if a tenderer does not show correctly the applicable taxes in the tender, no further claim can be raised by him at a

The arguments of the petitioner is that as per the tender conditions, work orders had to be issued within a period of one month. In fact, respondents 2 and 3 issued work order only after more than one month. The offer of the petitioner was not accepted for sixty days. Therefore, the respondents have to blame themselves and the petitioner cannot be blacklisted on that ground.

It has come out that while the tender processing was on, the L2 bidder had approached this Court filing W.P. (C) No.14171/2021. The said writ petition was dismissed only on 11.08.2021. The respondents issued a work order on 13.08.2021. The delay in issuing work order was obviously due to the pendency of the writ petition. When the petitioner

Furthermore, it is to be noted that the petitioner himself had sent Ext.P3 communication to the respondents on 16.07.2021 undertaking to do the work at the rate of 300.29 per MT, the effective rate after 9% discount offered by the petitioner. Therefore, it is evident that the petitioner was willing to execute the work taking into consideration the pendency of the writ petition but his only objection regarding the rate of discount of the GST.

It is to be noted that respondents 2 and 3 and the petitioner as well as the L2 bidder, namely Shyam Raj, were parties to Ext.P4 judgment. In the said judgment, this Court held that if a tenderer does not show correctly the applicable taxes in the tender, no further claim can be raised by him at a later stage under any circumstances. The provision in the tender notice is that if the rate of applicable taxes is shown incorrectly in the tender document, the financial burden arising

As far as blacklisting of the petitioner is concerned, the petitioner was issued with Ext.P7 notice on 28.09.2021. The petitioner submitted his reply on 17.08.2021 as per Ext.P6. It was after considering the reply of the petitioner that the respondents issued Ext.P7 order debarring the petitioner from participating in their tender in future and to forfeit EMD in the above tender. There is nothing in Ext.P7 order which would render it arbitrary or illegal. As Ext.P7 was passed after giving an opportunity of hearing to the petitioner, the principles of natural justice also stand complied with.