Ben Ten Industries vs. State Of Kerala - Kerala High Court, 17 July 2018

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN TUESDAY, THE 17TH DAY OF JULY 2018 / 26TH ASHADHA, 1940 WP(C).No. 20666 of 2018 PETITIONER(S): BENTEN INDUSTRIES, 67/33, KAMARAJ AVENUE, 1ST STREET, ADAYAR, CHENNAI-600 020. REPRESENTED BY ITS PARTNER, SRI. MAHAVISHNU, AGED 24 YEARS, S/O. VAIRAPRAKASAM. BY ADVS.SRI.GEORGE VARGHESE (MANACHIRACKEL) SRI.P.R.MILTON RESPONDENT(S): 1. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM-695001. 2. KERALA BOOKS AND PUBLICATIONS SOCIETY, KAKKANAD P.O., KOCHI - 692 030. REPRESENTED BY ITS MANAGING DIRECTOR. R1 BY GOVERNMENT PLEADER smt. PrINCY XAVIER R2 BY ADVS. SRI.K.ANAND (SR.) SMT.LATHA ANAND, SC, KERALA BOOKS PUBLICATIONS SOCIETY THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: RVS. WP(C).No. 20666 of 2018 (G) APPENDIX PETITIONER(S)' EXHIBITS: EXHIBIT P1 TRUE COPY OF THE E-TENDER NOTICE DATED 25.01.2018 ISSUED BY THE SECOND RESPONDENT. EXHIBIT P2 TRUE COPY OF THE AWARD OF CONTRACT LETTER DATED 08.03.2018 ISSUED BY THE SECOND RESPONDENT AND RECEIVED ON 22.03.2013. EXHIBIT P3 TRUE COPY OF THE EMAIL DT. 16.03.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P4 TRUE COPY OF THE LETTER DT. 20.03.2018 SUBMITTED BY THE PETITIONER TO THE SECOND RESPONDENT. EXHIBIT P5 TRUE COPY OF THE PURCHASE INVOICE DT. 16.04.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P6 TRUE COPY OF THE PURCHASE INVOICE DT. 17.04.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P7 TRUE COPY OF THE PURCHASE INVOICE DT. 19.04.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P8 TRUE COPY OF THE LETTER DATED 20.04.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P9 TRUE COPY OF THE LETTER DATED 28.04.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P10 TRUE COPY OF THE DEMAND DRAFT WORTH RS.6 LAKHS DRAWN BY THE PETITIONER IN FAVOUR OF THE SECOND RESPONDENT. EXHIBIT P11 TRUE COPY OF THE LETTER DT. 30.04.2018 SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT. EXHIBIT P12 TRUE COPY OF THE PURCHASE INVOICE DT. 22.05.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P13 TRUE COPY OF THE PURCHASE INVOICE DT. 28.05.2018 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P14 TRUE COPY OF THE SHOW CAUSE NOTICE DT. 05.06.2018 ISSUED BY THE SECOND RESPONDENT IN FAVOUR OF THE PETITIONER. WP(C).No. 20666 of 2018 (G) EXHIBIT P15 TRUE COPY OF THE REPLY LETTER DT. 07.06.2018 ISSUED BY THE PETITIONER TO THE SECOND RESPONDENT. EXHIBIT P16 TRUE COPY OF THE LETTER DT. 11.06.2018 ISSUED BY REGISTERED POST TO THE SECOND RESPONDENT. EXHIBIT P17 TRUE COPY OF THE LETTER NIL DATED ISSUED BY THE SECOND RESPONDENT. RESPONDENT(S)' EXHIBITS: EXHIBIT R2(A) TRUE COPY OF THE AGREEMENT DATED 20/03/2018. EXHIBIT R2(B) TRUE COPY OF THE DEMAND DRAFT DATED 05/04/2018. EXHIBIT R2(C) TRUE COPY OF THE RECEIPT DATED 13/04/2018. EXHIBIT R2(D) TRUE COPY OF THE DEMAND DRAFT DATED 12/04/2018. EXHIBIT R2(E) TRUE COPY OF THE RECEIPT DATED 17/04/2018. EXHIBIT R2(F) TRUE COPY OF THE PHOTOGRAPHS. EXHIBIT R2(G) TRUE COPY OF THE NOTE DATED 19/04/2018. EXHIBIT R2(H) TRUE COPY OF NOTE DATED 19/04/2018. EXHIBIT R2(I) TRUE COPY OF THE EMAIL DATED 23/04/2018. EXHIBIT R2(J) TRUE COPY OF THE EMAIL DATED 25/04/2018. EXHIBIT R2(K) TRUE COPY OF THE EMAIL DATED 25/04/2018. EXHIBIT R2(L) TRUE COPY OF THE EMAIL DATED 26/04/2018. EXHIBIT R2(M) TRUE COPY OF THE EMAIL DATED 27/04/2018. EXHIBIT R2(N) TRUE COPY OF THE COMMUNICATION DATED 28/04/2018. EXHIBIT R2(O) TRUE COPY OF THE WORK ORDER DATED 28/04/2018. EXHIBIT R2(P) TRUE COPY OF THE COMMUNICATION DATED 29/04/2018. EXHIBIT R2(Q) TRUE COPY OF THE EMAIL DATED 05/05/2018. EXHIBIT R2(R) TRUE COPY OF THE EMAIL DATED 15/05/2018. EXHIBIT R2(S) TRUE COPY OF THE EMAIL DATED 16/05/2018. EXHIBIT R2(T) TRUE COPY OF THE EMAIL DATED 17/05/2018. WP(C).No. 20666 of 2018 (G) EXHIBIT R2(U) TRUE COPY OF THE EMAIL DATED 18/05/2018. EXHIBIT R2(V) TRUE COPY OF THE EMAIL DATED 19/05/2018. EXHIBIT R2(W) TRUE COPY OF THE EMAIL DATED 23/05/2018. EXHIBIT R2(X) TRUE COPY OF THE EMAIL DATED 24/05/2018. EXHIBIT R2(Y) TRUE COPY OF THE EMAIL DATED 25/05/2018. EXHIBIT R2(Z) TRUE COPY OF THE NEWS ARTICLE IN MATHRUBHUMI DATED 08/05/2018. EXHIBIT R2(AA) TRUE COPY OF THE NEWS ARTICLE IN MALAYALA MANORAMA DATED 09/05/2018. EXHIBIT R2(AB) TRUE COPY OF THE REMINDER NOTE DATED 25/04/2018. EXHIBIT R2(AC) TRUE COPY OF THE REMINDER NOTE DATED 27/04/2018. EXHIBIT R2(AD) TRUE COPY OF THE NOTE DATED 02/05/2018. EXHIBIT R2(AE) TRUE COPY OF THE NOTE DATED 03/05/2018. EXHIBIT R2(AF) TRUE COPY OF THE NOTE DATED 05/05/2018. EXHIBIT R2(AG) TRUE COPY OF THE NOTE DATED 15/05/2018. EXHIBIT R2(AH) TRUE COPY OF THE NOTE DATED 22/05/2018. EXHIBIT R2(AI) TRUE COPY OF THE NOTE DATED 23/05/2018. EXHIBIT R2(AJ) TRUE COPY OF THE NOTE DATED 07/06/2018. EXHIBIT R2(AK) TRUE COPY OF THE DECISIONS IN THE 151 GOVERNING BODY MEETING DATED 01/06/2018. EXHIBIT R2(AL) TRUE COPY OF THE EMAIL DATED 07/06/2018. EXHIBIT R2(AM) TRUE COPY OF THE HAND WRITTEN LETTER DATED 11/06/2018. EXHIBIT R2(AN) TRUE COPY OF THE COMMUNICATION DATED 12/06/2018. EXHIBIT R2(AO) TRUE COPY OF THE COMMUNICATION DATED 13/06/2018. EXHIBIT R2(AP) TRUE COPY OF THE COMMUNICATION DATED 15/06/2018 WP(C).No. 20666 of 2018 (G) EXHIBIT R2(AQ) TRUE COPY OF THE ORDER DATED 16/06/2018 OF THE INSPECTOR OF FACTORIES AND BOILERS. EXHIBIT R2(AR) TRUE COPY OF THE NOTICE INVITING TENDER DATED 12/06/2018. /TRUE COPY/ P.S. TO JUDGE RVS. 24/07/2018 ANU SIVARAMAN, J. ----------------------------------------------- W.P(C).No. 20666 of 2018 ----------------------------------------------- Dated this the 17th day of July, 2018

JUDGMENT This writ petition is filed seeking the following reliefs: “i. issue a writ of mandamus or any other appropriate writ, order or direction to the second respondent and call for the records relating to Exhibit P17 termination order and quash the same as illegal and unsustainable. ii. issue a writ of mandamus or any other appropriate writ order or direction to the second respondent to provide paper cutting waste as per Exhibit P2 work order to the petitioner or to refund the security deposit of Rs.15 lakhs and the damages and loss caused to the petitioner forthwith.”

Heard learned counsel for the petitioner and the learned Senior Counsel appearing for the 2nd respondent Society as well as the learned Government Pleader.

The petitioner challenges Exhibit P17 termination order and seeks directions to refund the security deposit of Rs.15 lakhs as also payment of damages and loss caused to the petitioner. It is stated that the petitioner was the highest bidder in response to Exhibit P1 tender notice for removal of paper cutting waste for the years 2018-2019. The period of the contract was from 1.4.2018 to 31.3.2019. It is stated that Exhibit P2 work order was also issued to the petitioner. But, on the ground that the work had not been satisfactorily carried out by the petitioner, Exhibit P17 order of termination has been issued without hearing the petitioner. The petitioner contends that though a bank guarantee for Rs.15 lakhs had been provided and a demand draft for Rs.6 lakhs had been made available, the petitioner was not permitted to carry out the work in terms of the agreement entered into between the parties. It is stated that the entire effort of the respondents is to award the work to the second highest bidder, who had bid for Rs.16.40 lakhs + GST per metric tonne. It is also contended that the second highest bidder is presently being permitted to carry out the work at the lower rate of Rs.15.93 lakhs per metric tonne.

A detailed counter affidavit has been placed on record by the 2nd respondent. It is stated that though the petitioner was the highest bidder in response to Exhibit P1 tender, the petitioner did not remove the waste paper as provided in the contract which led to an alarming situation in the premises. It is stated that Exhibit P17 termination order itself shows that several notices had been issued to the petitioner but no steps had been taken to comply with the terms of the agreement. It is contended that since the situation was so alarming, the contract of the petitioner had to be terminated and the second highest bidder was required to carry out the work. It is further contended that no bank guarantee as alleged by the petitioner had ever been made available to the Society and that the demand drafts which were allegedly produced by the petitioner before the respondents were not sent along with the covering letter and that the demand drafts had been cancelled at the request of the petitioner on 3.5.2018 before the letter was even received by the 2nd respondent. The learned Senior Counsel appearing for the 2nd respondent also placed reliance on a decision of the Apex Court in Michigan Rubber (India) Limited v. State of Karnataka [(2012)8 SCC 216] to contend that the nature and scope of judicial review in matters relating to award and termination of contracts is extremely limited and would not extend to considering the factual aspects of the matter.

I have considered the contentions advanced on either side at considerable length. It is the specific case of the 2nd respondent which was borne out by the records produced by them along with the counter affidavit that after being the highest bidder in the contract and after executing the agreement with the Society, the petitioner had not carried out their contractual obligations as provided in the agreement. It is also contended that several notices had been issued to the petitioner to comply with the provisions of the contract but to no avail. In the above view of the matter, this Court would not be justified in interfering with Exhibit P17 order of termination of contract.

The petitioner's contention that the bank guarantee is liable to be returned and that damages are liable to be paid to him also cannot be countenanced in view of the specific pleadings of the respondents to the effect that no such bank guarantee had, as a matter of fact, been made available and that no amount remains to be paid to the petitioner in terms of the contract. The contention of the petitioner that the cancellation of the contract is only to favour the second highest bidder also does not seem to be borne out in view of the fact that the respondents have raised specific pleadings to the effect that what is contemplated is a re-tender of the work and that the entrustment to the second highest bidder is only an ad-hoc measure until steps are taken for re-tender in accordance with law. In the above view of the matter, the challenge against Exhibit P17 termination is devoid of merit. The prayers sought for cannot be granted. The writ petition fails and is accordingly dismissed. ANU SIVARAMAN JUDGE vgs18/7