Suvidha Enterprises vs. Food Corporation Of INDIA - Kerala High Court, 08 February 2019

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN FRIDAY ,THE 08TH DAY OF FEBRUARY 2019 / 19TH MAGHA, 1940 WP(C).No. 30877 of 2018 PETITIONERS: SUVIDHA ENTERPRISES DOOR NO. 3/729, KODATH HOUSE, KURUPPAMPADY PO, ERNAKULAM, 683545, REPRESENTED BY ITS MANAGING PARTNER, ANOOP K. MADHAV, AGED 36 YEARS, S/O.MAHAVAN, KODATH HOUSE, KURUPPAMPADY PO, ERNAKULAM 683545 BY ADVS. SRI.G.SANTHOSH KUMAR (P). SRI.LEYO SEBASTIAN RESPONDENTS: 1 FOOD CORPORATION OF INDIA 16-20 BARAKHAMBA LANE, NEW DELHI 110001, REPRESENTED BY ITS CHAIRMAN AND MANGING DIRECTOR 2 THE GENERAL MANAGER, FOOD CORPORATION OF INDIA, KESAVADASAPURAM, PATTAM P.O, THIRUVANANTHAPURAM 695 004. W.P.(C).No.30877/18 2 3 THE ASSISTANT GENERAL MANAGER, FOOD CORPORATION OF INDIA, KESAVADASAPURAM, PATTAM P.O, THIRUVANANTHAPURAM 695 004. 4 FRANKLIN RAJ D AGED 46 YEARS GRACE COTTAGE, THANIKKAVILA, CHAIKKOTTUKONAM P.O, THIRUVANANTHAPURAM 695 122. BY ADVS. SMT.K.R.KRISHNAKUMARI, SC, FOOD CORPORATION OF INDIA VIJAYAKUMARI THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P.(C).No.30877/18 3 JUDGMENT 1.Petitioner has approached this Court with the following prayers:- “(i)Issue a writ of certiorari calling for the original of Exts.P8, P11 and P13 and to quash the same. (ii)Issue a writ of mandamus or any other appropriate writ, order or direction commanding the 3rd respondent to finalise Ext.P5 tender in the name of the petitioner taking note of Ext.P12. (iii) To declare that the petitioner is entitled for the work as he is the lowest bidder as revealed by Ext.P12.”

The learned counsel for the petitioner submits that the petitioner was the lowest tenderer in respect of the work of providing Cement Concrete Road at FCI go-down at Mulakkunnanthukavu for the year 2018-2019. The estimated cost of the work was Rs.80,87,623/-. The petitioner had quoted an amount below the estimated rate, that is, an amount of Rs.80,84,387.7 whereas the 4th respondent had quoted the estimate amount itself. The learned counsel for the petitioner would submit that the tender has been cancelled, in order to

W.P.(C).No.30877/18 4 favour the 4th respondent and to ensure that the petitioner would be ousted from the field. Relying on the decisions of a Division Bench of this Court in Harikumar G v. Travancore Devaswom Board and others [ 2017(3) KHC 31] and of the Orissa High Court in Sical Logistics Ltd. v. Mahanadi Coal fields Ltd and other [2018 KHC 2640] and Nagarjuna Construction Company Ltd v. Bhuvaneswar Development Authority and others [2017 KHC 5384], the learned counsel for the petitioner would contend that where the tender inviting authority is a public functionary, the reasons for rejection of a tender have to be specified. Such reasons have to meet the conditions of fairness and lack of arbitrariness. The learned counsel would also contend that the successive communications, as are evident from Exhibit P7 dated 25.7.2018, Exhibit P8 dated 3.9.2018, Exhibit P9 dated 5.9.2018 and Exhibits P10 to P12, would show that there was clear illegality in the consideration of the issue by the FCI. It is contended that after the technical bid had been accepted on 25.7.2018, Exhibit P8 communication was issued stating that the tender has been rejected. However, thereafter, Exhibit P9

W.P.(C).No.30877/18 5 would show that the petitioner's financial bid was accepted during the financial evaluation. Exts.P10 and P11 communications would again show that the bid has been rejected. However, it is stated that Exhibit P12 printout dated 7.9.2018 would clearly reveal that the petitioner's bid stood accepted.

By Exhibit P13 proceedings dated 11.9.2018, the petitioner was informed that both the tenders have been rejected and it was decided to cancel the tender. The reason stated is that the rates quoted by the petitioner and the second lowest tenderer is almost the same. It is stated that in order to explore the possibility of getting more competitive rates, the competent authority has rejected both the tenders and directed to recall the same. It is further stated that recently, tender at 27.77% below the estimated cost was received for the Cement Concrete Road at the F , Kazhakoottam. The learned counsel for the petitioner challenges the order or rejection on the ground that it is not a proper exercise of power and that the intention is to favour the 4th respondent.

W.P.(C).No.30877/18 6 4.A counter affidavit has been placed on record by the respondents. The reasons for the confusion in the communication is sought to be explained as follows:- “3.At the outset, it is submitted that Ext.P8 letter dated 03.09.2018 was sent to the petitioner by the 3rd respondent intimating rejection of his tender stating the reason that the competent authority has rejected his tender. Though Ext.P9 message was served on the petitioner by the Government electronic Procurement System on 05.09.2018 due to the mistake of these respondents while uploading in the e-procurement System and the entry of “accepted” was made instead of “rejected”. Immediately on coming to know about the above mistaken entry on 6.9.2018 itself, corrigendum option was invoked apologizing the inconvenience and the entry was correctly uploaded as “rejected”. Thus Exts.P10 & P11 messages were served on the petitioner by the Government electronic Procurement System on 6.9.2018 intimating the petitioner that his tender has been rejected for the reason “The competent authority has rejected the tender”. Even then, on 7.9.2018, the petitioner took out Ext.P12 print out from the Government e- Procurement System regarding the Bid Submission Confirmation of his tender which was submitted by him on 28.Jun-2018 at 1.18 PM. The detailed reason for rejection of his tender was explained to him in Ext.P13 reply. Even after knowing very well from Exts. P8, P11 and P13 that the competent authority has rejected his tender, the petitioner, who had accepted all the terms and

W.P.(C).No.30877/18 7 conditions of Ext.P5 tender, filed the above writ petition as experimental measure without making the competent authority in the party array and by misusing the mistake of these respondents in Ext.P9 and by producing Ext.P12 as an intimation received from the 3rd respondent on 7.9.2018 and thereby misleading this Hon'ble Court. The (Earnest Money Deposit) EMD furnished by the petitioner was also refunded to the petitioner and therefore nothing survives in the writ petition. Having accepted the refund of EMD the petitioner is estopped from challenging the decision of competent authority. It is therefore humbly submitted that the above Writ Petition is liable to be dismissed with heavy costs to these respondents on all the above grounds.”

It is further stated that the technical bids were opened on 29.6.2018 and the bid of the petitioner as well as the 4th respondent were accepted. It is stated that the price bids were opened on 25.7.2018. Since there were less than three tenders, the price bid opening summary and price bid details were forwarded to the competent authority, that is, the General Manager (Engineering), Zonal Office, Chennai for scrutiny and approval of the price bids. It is stated that the Competent Authority had initmated by Exhibit R1(a) letter that the price bids were cancelled to explore the possibility of getting more competitive rates. It is stated that thereafter the

W.P.(C).No.30877/18 8 petitioner had been duly informed that the tenders stood rejected. It is stated that on 5.9.2018, while uploading the decision in the e-procurement portal, by a typographical error the word 'accepted' was entered for both L1 and L2 tenders instead of 'rejected'. Ext.R1(c) dated 5.9.2018 is produced in support of this contention. It is stated that on coming to know of this error, a correction was effected on 6.9.2018, which was duly intimated to the petitioner in real time by Exhibit P10. 6.In the instant case, it is submitted that the competent authority, as provided in Exhibit R1(g) notice inviting the tender, had taken a decision to go for a new tender, since there were only two participants and the price quoted by them was almost the same. It is stated that the notice informing tender contained a specific condition that the tenders were liable for acceptance of competent authority, that is, General Manager (Engineering) and that the competent authority has the right to reject the lowest tender without assigning reasons. 7.It is stated that Exhibit P12 print out was taken by the

W.P.(C).No.30877/18 9 petitioner by using his digital signature on 7.9.2018 and that the said print out was what was available in the web site on 5.9.2018 before corrections have been effected.

The learned standing counsel for the respondents would contend that the reasons for rejection of both the valid bids had been duly intimated to both the petitioner and the 4th respondent well in time. It is stated that Exhibit P13 communication dated 11.9.2018 also clearly referred to the decision of the competent authority not to accept the tender. It is stated that no attempt has been made to favour the 4th respondent or any other person since the tender itself stands cancelled and the petitioner is free to participate in the fresh tender proceedings which are liable to be intimated in due course. It is stated that even in spite of being informed of the reasons, the petitioner has taken no steps to implead the competent authority as specified in the notice inviting tender as a party to the proceedings. It is therefore contended that without impleading the proper authority who has taken a decision to cancel the tender and without impleading the

W.P.(C).No.30877/18 10 provisions of the notice inviting tender the writ petition would not be maintainable. The learned standing counsel relies on the decision of the Apex Court in State of Orissa and others v. Harinarayanan Jaiswal and others [1972 KHC 446] to contend that a challenge against Exhibit P13 without challenging the enabling provision in the notice inviting tender to reject the tender for appropriate reasons would be invalid. The decision of the Apex Court in State of West Bengal and others v. Niranjan Singha [2001 KHC 1022 SC], Food Corporation of India v. M/s.Kamdhenu Cattle Feed Industries [1993 KHC 849 SC] and Gangalla Rambabu and others v.Zonal Manager, Food Corporation of India [AIR 1988 AP 304] and Matushri Trading Company, Chhattisgarh v. Dean (Cims) Chhattisgarh Institute of Medical Sciences, Hospital, Bilaspur and others [AIR 2018 Chh.51] are relied on to contend that where there is power in the competent authority to cancel the tender, the rejection of the petitioner's tender and the cancellation of the tender itself for reasons stated cannot be interfered with by this Court.

W.P.(C).No.30877/18 11

I have considered the contentions advanced. The learned counsel for the petitioner submits that there was clear confusion with regard to the decision whether the financial bid of the petitioner was accepted or rejected. It is stated that conflicting communications were issued as late as on 7.9.2018 in the matter. It is therefore contended that the decision to reject the petitioner's financial bid and to opt for a re-tender was completely vitiated. It is further contended that it is clear that it is only to favour the 4th respondent, who is the present contractor, that the exercise was adopted by the respondents. 10.Having considered the contentions advanced in the counter affidavit and the sequence of events and the documents produced, it appears that the explanation offered by the respondents with regard to an incorrect uploading in the e- procurement portal on 5.9.2018 appears to be an acceptable one. On 3.9.2018, the petitioner was informed that the bid was rejected. However, on 5.9.2018, Exhibit P9 communication has been issued through the Government e- procurement system that the tender was accepted during

W.P.(C).No.30877/18 12 financial evaluation. The further communications confirmed that the bid was rejected. However, Exhibit P12 said to be dated 7.9.2018 is relied on to contend that the petitioner is again informed that the bid was accepted. It is only by Exhibit P13 that a communication has been issued to the petitioner showing the reason for the rejection of the tender. The sequence of events as pointed out in the counter affidavit and the documents produced in support thereof explains the discrepancy in the communications issued with regard to the rejection of the financial bid submitted by the petitioner. The competent authority, whose decision as to the acceptance of bid is crucial even going by the tender notice, is not a party to the writ petition. Even in spite of an order of rejection by the competent authority having been produced along with the counter affidavit, no steps have been taken by the petitioner either to implead the competent authority or to assail the order of rejection passed by the said authority. Exhibit R1(a) letter dated 14.8.2018 specifies the reason for the non- acceptance of the bid.

W.P.(C).No.30877/18 13 11.The learned counsel for the 3rd respondent contends that the bid of the 4th respondent was also rejected. The petitioner has also not been able to substantiate the contention that the attempt is to help the 4th respondent in any manner. 12.In the above view of the matter and in view of the fact that the competent authority is not a party to the writ petition and no challenge is raised as against Exhibit R1(a) letter or the competent authority, I am of the opinion that the prayers sought for in this writ petition cannot be granted. The writ petition fails and is accordingly dismissed. Anu Sivaraman, Judge sj

W.P.(C).No.30877/18 14 APPENDIX PETITIONER'S EXHIBITS: ANNEXURE-A1 ORIGINAL INSPECTION NOTICE. ANNEXURE-A2 PHOTOGRAPHS (NINETEEN NOS.) EXHIBIT P1OF THE ACKNOLEDGEMENT OF REGISTRATION OF FFIRM ISSUED BY THE