Dismissed

E.K.Zakeer Shamnad and Another v. the General Manager

Kerala HC12 Jul 2010WP(C)/18297/2010

Case brief

AI extract

What is this about?

In a writ petition regarding the cancellation of a tender for underground cable construction in Kerala due to excessively quoted rates, the High Court held that authorities are under no legal compulsion to negotiate when rates are abnormally high, dismissing the petition while noting the matter was pending re-tender evaluation.

What did the court decide?

The writ petition was dismissed. Petitioners directed to file a representation seeking an extension of the tender submission deadline.

E.K.Zakeer Shamnad and Another Vs the General… — Public Procurement and Tenders | Kerala HC (2010)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR

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MONDAY, THE 12TH JULY 2010 / 21ST ASHADHA 1932

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WP(C).No. 18297 of 2010(J)

PETITIONER(S):

E.K.ZAKEER SHAMNAD,S/O.HARIZ,AGED 42 YRS (PRESIDENT,UNDERGROUND CABLE CONTRACTORS ASSOCIATION),KANNUR SSA),RESIDING AT SHAMBAD VILLAGE,P.O.CHEMMAD,KASARAGOD DISTRICT.

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P.A.MAHAMOOD,S/O.LATE P.A.AHAMOOD, AGED 43 YEARS,(SECRETARY,UNDERGROUND CABLE CONTRACTORS ASSOCIATION),KANNUR SSA),RESIDING AT P.A.HOUSE,P.O.PALLIKKARA,KANHANGAD, KASARAGOD DISTRICT.

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BY ADV. SRI.C.P.PEETHAMBARAN SRI.B.R.VIJAYABABU

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RESPONDENT(S):

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THE GENERAL MANAGER,TELECOM,BHARAT SANCHAR NIGAM LTD.,KANNUR-670 002.

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THE ASSISTANT GENERAL MANAGER,TELECOM, BHARAT SANCHAR NIGAM LTD,KANNUR-670 002.

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ADV. SRI.P.J.PHILIP,SC,BSNL(BHARAT SANCHAR N FOR R1 & 2

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/07/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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T.R. RAMACHANDRAN NAIR, J.

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~~~~~~~~~~~~~~~~~~~~~~~~~~~

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W.P.(C). No.18297/2010-J ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 12^th day of July, 2010

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J U D G M E N T

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The petitioners are aggrieved by Ext.P4 communication issued by the Assistant General Manager for General Manager Telecom, Kannur informing that the tender for U.G Cable construction work under Kannur SSA under reference shown in the letter has been cancelled by competent authority due to technical reasons.

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Ext.P1 is the notification inviting tender. In clause 14 therein it is stated that the authority has the right to reject any or all the tenders without assigning any reason what-so-ever. It is the case of the petitioners that three contractors, who are not the members of the petitioners' association and are very close to the officers of the respondents, could not submit tenders and at their instance, showing wild allegations, some news items were published in the newspapers, which have been explained by the authorities of the B.S.N.L. Exts.P2 and P3 have been produced in support of the above arguments.

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The second respondent has filed a counter affidavit.

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The learned counsel for the petitioners submitted that what is shown in the counter affidavit as a reason in

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W.P.(C). No.18297/2010

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support of Ext.P4 is that the rates quoted are highly excessive and therefore, they have decided to have a retender. It is pointed out by reference to documents in Ext.P5 that respondents have been initiating process of negotiations even if it is found that the rates quoted are high and this is the accepted practice in the Department also. It is therefore, submitted that the decision taken to have a re-tender is clearly erroneous. Reliance is

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placed on the decision of the Apex Court in Haji T.M.

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Hassan Rawther v. Kerala Financial Corporation [(1988) 1

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SCC 166] in support of the argument that instead of public auction, private negotiations will not be in violation of the principles under Article 14 of the Constitution of India.

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The learned Standing Counsel for the respondents submitted that the contentions raised by the petitioners are not correct. After the tenders were submitted, the matter was referred to the Evaluation Committee and the report of the Evaluation Committee is available as Ext.R2 (g). The Tender Evaluation Committee evaluated all the valid tenders received and found that exorbitant rates have been quoted by the tenderers concerned, namely, upto 290% and the lowest offer is 118%, above the estimated rate. Accordingly, the Committee was of the view that all the rates quoted are abnormally high, i.e., 5 to 12 folds of

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W.P.(C). No.18297/2010

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the approved rates of the last two years for the same work. Therefore, the Tender Evaluation Committee unanimously recommended cancellation of tender and calling of fresh tender.

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The present plea raised by the petitioners is that even then the petitioners ought to have been called for a negotiation since every year, the tenderers who are enlisted by the Department have to undertake the work after scaling down the quoted rates even by suffering loss for executing the work.

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Clause 14 of Ext.P1 in the notification confers power for cancellation of the tender. There is nothing in law which compels the respondents to enter into negotiation. It is upto them to take a decision after evaluating the various tenders and therefore, the petitioners cannot compel them to accept the tenders or find fault with them for not entering into negotiations. Here the Tender Evaluation Committee, after tabulating the entire tenders received, found that the estimate quoted are so high and even the lowest quoted is above 118% of the basic rate. It cannot therefore be said that the decision taken by the Tender Evaluation Committee is erroneous for violation of any statutory provisions, or the established procedure, or without applying their mind. It is not the law that the lowest tender or any other tender will have to

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W.P.(C). No.18297/2010

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be accepted by the authority concerned. The right to reject or accept any tender is vested with the concerned authority itself. Only compulsion is that there should be a fair procedure. This Court cannot therefore sit in appeal over the decision of the authority herein to cancel the tender and to go for a re-tender. The financial constraints have really lead to the cancellation of the tender and in such matters, there is sufficient play in the joints for the respondents for exercising such powers.

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The learned counsel for the petitioners further pointed out that if actually the reasons shown in the counter affidavit were there, they should have found a place in Ext.P4 itself.

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What is involved is only the cancellation of the tender and the respondents have demonstrated the reasons by producing sufficient materials which have lead to the decision reflected in Ext.P4 which cannot be said to be erroneous for want of all details.

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Therefore, I find no reason to interfere with Ext.P4. Pending the writ petition, several contractors have submitted tenders in response to the re-tender notification. It is now submitted that the matter is pending with the respondents and the processes are yet to be finalised. The learned counsel for the petitioners submitted that the tender submitted by the petitioners may

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W.P.(C). No.18297/2010

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also be considered which is stoutly opposed by the learned counsel for the Department stating that they have already rejected the same.

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It is then submitted by the learned counsel for the petitioners that the last date for submission of tenders in response to re-tender notification was 05/07/2010 and the petitioners did not submit the tenders in the light of the pendency of the writ petition and, therefore, a further opportunity shall be given to them to submit tenders. This is a matter which the Department itself will have to consider. The petitioners may therefore file appropriate representation before the first respondent seeking for any such relief by way of extension of the last date for submitting tender or to have a fresh notification.

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If such representation is submitted by the petitioners, the same will be considered before the finalisation of the tenders already received. The writ petition is dismissed subject to the above observations. No costs.

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(T.R. Ramachandran Nair, Judge.)

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E.K.Zakeer Shamnad and Another v. the General Manager

Case brief

What is this about?

What did the court decide?

E.K.Zakeer Shamnad and Another v. the General Manager

Case brief

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What did the court decide?

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