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2017 DIGILAW 322 (KER)

T. J. SIMON v. KERALA WATER AUTHORITY, REPRESENTED BY ITS MANAGING DIRECTOR

2017-02-15

SHAJI P.CHALY

body2017
JUDGMENT : This writ petition is filed by the petitioners seeking to quash Exts.P6 and P7 orders passed by the 3rd and 1st respondents respectively dated 28.12.2016 and 30.12.2016, whereby the tender invited as per Ext.P1 was cancelled and directed to re-tender the works, and for other related reliefs. Material facts for the disposal of the writ petition are as follows: 2. Petitioners are registered contractors with Kerala Water Authority. The 4th respondent issued Electronic tender notice as per Ext.P1 dated 15.11.2016, inviting tenders for the 28 items of work. Petitioners participated in the tender and they became the lowest tenderers in respect of three separate works viz., Sl.Nos.8, 5 and 18 in Ext.P1 tender notice. The bids were opened in the presence of the contractors. According to the petitioners, they signed in the register accepting that they are the lowest tenderers. The 4th respondent issued Exts.P2 and P4 letters to petitioners 1 and 2 respectively, calling upon them to reduce the rates to a reasonable level. In response to the said letters, the said petitioners issued Exts.P3 and P5 dated 13.12.2016, expressing readiness for negotiation and stated that they are ready to undertake the work at 10% above the estimated rates. A similar letter was issued to the 3rd petitioner also, which was replied in the same manner as that of the communication issued by petitioners 1 and 2. 3. It is the submission of the petitioners that they are having sufficient experience in executing the work for the 4th respondent, and they were awaiting work orders from the respondents. While so, two contractors who failed to satisfy the tender qualifications and also failed to satisfy the experience criteria, submitted complaints against the tenders submitted by the petitioners and other contractors. However, under the influence of the above said contractors, 4th respondent submitted a report to the 3rd respondent. Based on the above report, the 3rd respondent found that two offers submitted by one Aneesh and Anirudhan were below the estimated rates. But, those two offers were not accepted since they have not complied with the Special Condition No.5 to the effect that a certificate from the Assistant Engineer through Assistant Executive Engineer of Kerala Water Authority shall be obtained recording his previous experience in running contract works, or he has executed 4 pipeline works in the last year under the Division in question. Because of the said condition, 3rd respondent found that more offers are not obtained. Accordingly, 3rd respondent recommended to cancel all the tenders pursuant to Ext.P1, and further, 4th respondent was directed to re-tender the works by modifying the special condition as specified above. It was thereupon that 3rd respondent reported to the 1st respondent, recommending the cancellation of tenders, evident from Ext.P6. Based on Ext.P6, 1st respondent issued Ext.P7 order, cancelling Ext.P1 tender and directing to re-tender the works. It is thus challenging Exts.P6 and P7, this writ petition is filed. 4. First respondent has filed a counter affidavit, submitting that the 1st petitioner was the lowest tenderer for tender No.30/2016-17 by quoting 14% above the tendered PAC. The 2nd petitioner quoted 14% above the estimated rate for tender No.35/2016-17, and 3rd petitioner quoted for tender No.48/2016-17 12% above the estimated rate, which were the lowest. 5. First respondent issued proceedings dated 28.10.2016, delegating the power of officers of KWA to sanction tender excess not exceeding 10% of a tendered PAC, evident from Ext.R1(a). Hence, any of the officers in KWA could not sanction lowest offers quoted above 10% of the tendered PAC. The quoted rate was found too high and negotiations were made by the 4th respondent with the said contractors to reduce the rate. The Kerala Water Authority has taken a decision to the effect that negotiation with L1 shall not be done in e-tendering, evident from Ext.R1(b). Hence, no negotiation can be received by the tendering authority. 6. On 21.12.2016, the 1st respondent informed respondents 2 to 4 that a complaint is received stating that there is collusion among the bidders in the tender of Running Contract (RC) works for maintenance under Water Supply Division, Neyyattinkara. The fact that not more than two contractors have participated in each of the bids and the subsequent bidding pattern in which each bidder is placed as lowest in one of the bids is an indication to believe that "cartel activity" was there in the bidding process. It is also observed that the quoted rates are more than double the accepted PAC for similar works in the previous year, which is not at all logical and acceptable. It is also observed that the quoted rates are more than double the accepted PAC for similar works in the previous year, which is not at all logical and acceptable. The 1st respondent directed the 3rd respondent to examine the matter in detail, and submit a suitable recommendation regarding the tenders, as the main objective of e-tendering was to eliminate such aberrations and practices which existed in the earlier manual tendering process and to get competitive offers. 7. It is submitted that, on the directions issued by the 1st respondent, all tenders were scrutinized by the 3rd respondent thoroughly and noted that the 4th respondent has observed all tender procedures while inviting the tender. But, it is seen that two offers were obtained for all the tenders. A copy of analyzing tender pattern for all tenders, except 47 and 51, is produced as Ext.R1(c). Each bidder has quoted the lowest rate for one tender and acted as a supporter for another. That apart, it is stated, while evaluating the tenders in the Division office, the offers of two persons were not accepted as they were not complying with clause No.5 of the special condition of Notice Inviting Tender (NIT), that all tenderers who are participating for running contract shall produce a certificate from the Assistant Engineer through Assistant Executive Engineer of the concerned section to the effect that the contractor has previous experience in RC works, or he has executed four pipeline works in the last year under this division. It was also presumed that the reason for not obtaining more offers is due to the inclusion of this special condition No.5 in the NIT. It was in the light of the above observation contained under Ext.P6 that the tender was cancelled as per Ext.P7 and directed to re-tender the contract. 8. It is also submitted that, 4th respondent re-tendered the works as directed by the 1st respondent with due date of opening as 19.01.2017 and the same was opened on 19.01.2017, and on evaluation, it is seen that all the 28 numbers of tender obtained are lower than the offers received in the original tender, and also within the sanctioning powers of the authority. It is also pointed out that the same contractors who quoted higher rates in the original tender have come down to acceptable rates in the re-tender. It is also pointed out that the same contractors who quoted higher rates in the original tender have come down to acceptable rates in the re-tender. By re- tendering, an amount of Rs.30.20 lakhs is saved by the public exchequer, and a copy of the comparative statement of the tender and re-tender quotes is produced as Ext.R1(d). Therefore, it is the case of the 1st respondent that there is no malafides, illegality or any other shortcomings on the part of the 1st and 3rd respondents in taking appropriate steps to cancel Ext.P1 tender notification. 9. Petitioners have filed a reply affidavit reiterating the contentions stated in the writ petition and also producing Exts.P8 and P9 dated 13.02.2017 issued apparently pursuant to the re-tender notification. 10. Heard learned counsel for the petitioners and the learned Standing Counsel appearing for the respondents and perused the documents on record and the pleadings put forth by the respective parties. 11. The material question to be considered in this writ petition centers around Exts.P6 and P7. The discussion made above will make it clear that notification of Ext.P1 tender, and submission of the tenders by the petitioners are all admitted facts. The question remains to be considered is, whether there is any illegality or irregularity on the part of the respondents in cancelling Ext.P1 tender and issuing re-tender notice for the same works. 12. In Ext.P6, what I could gather is that, a detailed study was conducted by the 3rd respondent, apparently on the instructions of the 1st respondent, and it was found that the tenders quoted by the petitioners were on the higher side, and even though as per communications issued by the respondents to reduce the rates, petitioners were not prepared to negotiate in order to arrive at a reasonable rate over and above the PAC. The maximum offers that were made by the petitioners is 10%/12% above the PAC. The same was not suitable to the respondents. The maximum offers that were made by the petitioners is 10%/12% above the PAC. The same was not suitable to the respondents. Moreover, it was found by the 3rd respondent that consequent on the imperative special condition No.5 in the notice inviting bid that the contractors who have participated in the Running Contract in the previous years should furnish performance certificate of the concerned Assistant Executive Engineer of the Kerala Water Authority about his previous experience in running contract works; or he has executed 4 pipeline works in the last year under the Division in question, that less number of tenders were received. It was also found that the special condition stood in the way of more tenderers responding to the invitation and submitting their tenders, which were not feasible to the respondents. Thereupon, the said condition was removed and re-tenders were invited. 13. The question again remains to be considered is whether there is any legal infirmity in relaxing the conditions. In my considered opinion, it is for the master to decide the manner in which the work is to be carried out. On evaluation, it was found that the rates quoted by the petitioners were not feasible. Therefore, the findings contained under Ext.P6, in my considered opinion, are reasonable and intended to make the contract more feasible, and for saving public money. In that view of the matter, it cannot be said that Ext.P6 suffers from any legal consequences so as to warrant interference of this Court under Article 226 of the Constitution of India. Ext.P7 is an order passed by the 1st respondent in consequence of Ext.P6 decision taken by the 3rd respondent, on enquiry as per the directions of the 1st respondent and it is issued after evaluating the circumstances mentioned in Ext.P6. Therefore, it cannot be said that Ext.P7 suffers from any manner of illegality. It was thereupon only fresh tenders were invited, and it is evident that substantial amounts are saved by the respondents. 14. Taking into account all these facts and circumstances, and reckoning the legal position in respect of the award of contract, I do not think that petitioners have made out sufficient grounds. Moreover, there is only an invitation and offer and there is no concluded contract at all. Apart from all these aspects, petitioners failed to substantiate any case of illegality, malafides or other legal infirmities. Moreover, there is only an invitation and offer and there is no concluded contract at all. Apart from all these aspects, petitioners failed to substantiate any case of illegality, malafides or other legal infirmities. Therefore, petitioners cannot challenge the action taken by the respondents in a writ proceedings, and if at all the petitioners have suffered any damages, the same cannot be remedied in a proceeding under Article 226 of the Constitution of India also. Sequel to the above discussion is, writ petition fails, accordingly it is dismissed.