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2017 DIGILAW 692 (KER)

RAJEEV GANDHI HOUSE CONSTRUCTION CO-OPERATIVE SOCIETY LTD. v. STATE OF KERALA

2017-04-07

DAMA SESHADRI NAIDU

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JUDGMENT : The petitioner, a society, was awarded a civil work: manual dredging of sand at Azhikkal Port. It entered into Ext.P2 agreement with the Government. Now its grievance is that though Ext.P1 government order prescribes 30% of the sale price to be paid to the Government, it has demanded more amount through Exts.P5 and P6. 2. Ms. Aruna, the learned counsel for the Society, submits that Ext.P1 Government order still remains undisturbed. So long as that order holds the field, she argues, the Government cannot unilaterally change the price of sand or its share out of the sale price. Further, drawing my attention to Exts.P3 and P4, the later Government Orders issued in modification of Ext.P1, Ms. Aruna has further submitted that in neither of those orders has the Government's share originally fixed at 30% of the sale price been disturbed. 3. Per contra, the learned Government Pleader has submitted that Ext.R3(a) tender conditions in clause-8 explicitly mention that the lowest amounts mentioned by a society qualified for dredging the material will alone be given to that society. The amount realised as sale price over and above the amount quoted by the society will automatically go to the Government. And the Society can have no grievance about it. 4. Drawing my attention to clause-9 of Ext.R3(a), the learned Government Pleader has also contended that any society that had quoted a higher price could still adopt the lowest price quoted by another society. Here, according to the learned Government Pleader, the Society adopted Rs.516/- as the price it would receive for dredging the sand in Azhikkal port. So, the Government's action in realising the sale price after leaving whatever the price quoted by the society as its charges does not amount to any illegality. 5. Heard Ms. A. Aruna, the learned counsel for the Society, and the learned Government Pleader for the respondents, besides perusing the record. 6. True, the Ext.P1 Government Order, dealing with the cost of the dredging material payable to the Government, mentions that 30% of the sale price of the dredged material sold by the permit holder should be paid to the Government. Exts.P3 and P4, the later Government Orders, as rightly contended by the Society's counsel, do not modify the share payable to the Government. 7. Exts.P3 and P4, the later Government Orders, as rightly contended by the Society's counsel, do not modify the share payable to the Government. 7. But the tender conditions, acting on which the Society secured the tender, clarify that the society is entitled to the lowest amount it quoted or adopted. In Ext.P2 agreement the society entered with the Government, it has undertaken to abide by all the existing rules and regulations and all the conditions to be prescribed by the port authorities from time to time for conducting manual dredging in ports. The agreement also specifies that if the Government, or the Ministry, or the Tender Committee refixes "the price of the product of manual dredging," the society shall pay the additional amount before the date fixed by the authorities. Of the same agreement, Clause 12 fixes the sale price at Rs.1352/-. 8. Now the society contends that the Government is entitled to only 30% of the sale price as per Ext.P1 Government order; the sale price being Rs.1353/-, it cannot realise more than Rs.406/- with 10% added annually. 9. There is, I am afraid, a fallacy in the Society's assertion. The Government owns the port and the dredged sand, too. It uses the Society's services--time and labour--to dredge the material and sell it in the market. Throughout, it remains the owner. Yet, as it uses the Society's services, it must compensate the Society remuneratively--at the rate agreed to. While filing its bid, the society consciously agreed to receive Rs.565/- per tonne as its charges for the dredging work it carries. 10. At this juncture the learned counsel for the Society has submitted that many societies participated and most of the societies quoted very low prices. If the Government acts on that pricing method, the dredging becomes unworkable. Once the Government has issued an order prescribing the percentage of sale price it must receive, without varying that order, the Government cannot, asserted the Society, realise more amount than what has been prescribed. 11. Regrettably the Society's contention does not carry it any farther. The agreement, it has entered into with the Government, binds the Society. Equally binding are the tender conditions acting on which it applied. 11. Regrettably the Society's contention does not carry it any farther. The agreement, it has entered into with the Government, binds the Society. Equally binding are the tender conditions acting on which it applied. Once the Society has quoted a specific price as recompense for the services it renders to the Government--dredging the port--it cannot be heard saying that the Government should take the fixed amount, leaving the rest to it. 12. Before I conclude, I must mention about the Society's collateral plea: that the society is still paid less amount than its quoted amount. Without attesting to the correctness of that submission, I observe that the Society can as well submit to the Government a representation containing the calculations to show in what manner the Society has been shortchanged. That representation received, the Government will pass appropriate orders, at the earliest. That said, reverting to the merits, I hold that the Society is bound by the agreement it has entered into with the Government and also the tender conditions on which it has impliedly agreed to be bound while offering its bid. So I see little merit in the Society's contention that the Government has been overcharging the Society. Accordingly, I dismiss the writ petition. No order on costs.