Dismissed

Ezhvathuruthy Kayar Vyavasaya Sahakarana Sangam v. the State of Kerala

Kerala HC17 Jul 2012WP(C)/11010/2012

Case brief

AI extract

What is this about?

The court examined eligibility criteria for co-operative societies to tender for sand dredging in Ponnani port. While restricting tenders to traditional sand mining workers is valid, the court directed that if no sufficient number of qualified societies participate, the Court's previous interim order permitting all labor societies to bid must be followed.

What did the court decide?

The writ petitions of societies formed after the tender deadline were dismissed. The ordinary petitions were disposed of directing the respondents to conduct the auction with the provision that if no

Ezhvathuruthy Kayar Vyavasaya Sahakarana Sangam Vs the… — Property and Title | Kerala HC (2012)

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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 K.SURENDRA MOHAN

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TUESDAY, THE 17TH DAY OF JULY 2012/26TH ASHADHA 1934 WP(C).No. 11010 of 2012 (A) ---------------------------

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PETITIONER:

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EZHVATHURUTHY KAYAR VYAVASAYA SAHAKARANA SANGAM ERIKKAMANNA, PONNANI (PO) MALAPPURAM REPRESENTED BY ITS SECRETARY. BY ADVS.SRI.K.B.ARUNKUMAR SRI.RANJIT BABU

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RESPONDENTS:

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THE STATE OF KERALA REPRESENTED BY ITS SECRETARY FISHERIES AND PORT DEPARTMENT, SECRETARIAT THIRUVANANTHAPURAM, PIN-695001.

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DIRECTOR OF PORTS THIRUVANANTHAPURAM, PIN-695001. 3. THE PORT CONSERVATOR PORT OFFICE, PONNANI NAGARAM P.O., PONNANI MALAPPURAM DISTRICT, PIN-679583. 4. THE PORT OFFICER PONNANI NAGARAM (PO), PONNANI, MALAPPURAM DISTRICT PIN-679583. 5. THE DISTRICT COLLECTOR CIVIL STATION, MALAPPURAM, PIN-676505.

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ADDL.RESPONDENTS:

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SOUTH MALABAR MANAL MARKETING & PROCESSING CO-OPERATIVE SOCIETY LTD., REG.NO:M 846 NARIPPARAM (PO) PONNANI TALUK, MALAPPURAM DISTRICT REP.BY ITS SECRETARY (IMPLEADED AS ADDL SIXTH RESPONDENT AS PER ORDER DT.24-5-2012 IN I.A.6548/2012) 7. P.T.ALI, PRESIDENT PONNANI TALUK MANAL MARKETING AND PROCESSING CO-OPERATIVE SOCIETY LTD. M.854 POST PONNANI, MALAPPURAM DISTRICT (IMPLEADED AS ADDL.SEVENTH RESPONDENT AS PER ORDER DT.24-5-2012 IN I.A.6719/2012)

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M.P.AYYAPPU, AGED 55 YRS., S/O.KORMAN, MODENPARAMBIL HOUSE, PURATHOOR VILLAGE, PURATHOOR P.O., THIRUR TALUK MALAPPURAM DISTRICT

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VELAYUDHAN M.P. PURATHOOR VILLAGE, PURTHOOR P.O. THIRUR TALUK, MALAPPURAM DISTRICT

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VELAYUDHAN T.P., AGED 65 YRS. S/O. KRISHNAN, RESIDING AT THOTTUNGAPURA HOUSE, PURATHOOR VILLAGE PURATHOOR P.O. THIRUR TALUK, MALAPPURAM DISTRICT

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MUHAMMEDBAVA T.P., AGED 55 YRS, S/O.HASSAINAR RESIDING IN TANGAINAMBRATH HOUSE, PURATHOOR VILLAGE

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PURTHOOR P.O., THIRUR TALUK, MALAPPURAM DISTRICT

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(IMPLEADED AS ADDL. RESPONDENTS 8 TO 11 AS PER ORDER DT.6-6-2012

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IN I.A.7077/2012)

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THEERADESA MANAL VARAL PROCESSING AND MARKETING THOZHILALI SAHAKARANA SANGHAM, PUTHU PONNANI P.O.,PONNANI SOUTH MALAPPURAM DISTRICT REP. BY ITS PRESIDENT ABDUL NAZAR

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(IMPLEADED AS ADDL.RESPONDENT 12 AS PER ORDER DATED 12-6-2012 IN

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I.A. 7476/2012)

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BY ADV. SRI.JOBI JOSE KONDODY BY ADV. SRI.C.M.MOHAMMED IQUABAL BY ADV. SRI.K.N.CHANDRABABU BY ADV. SRI.RAJIT BY SPL. GOVERNMENT PLEADER SHRI.D.SOMASUNDARAM THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17-07-2012 ALONG WITH WPC. 12187/2012 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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APPENDIX IN WP(C) 11010/2012

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PETITIONER(S) EXHIBITS

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EXHIBIT P1: THE TRUE COPY OF THE NOTIFICATION ISSUED BY THE 1ST RESPONDENT.

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EXHIBIT P2: THE TRUE COPY OF THE CIRCULAR ISSUED BY THE 2ND RESPONDENT.

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EXHIBIT P3: THE TRUE COPY OF THE JUDGMENT DATED 29-09-2011 IN WPC NO. 21221/2011.

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EXHIBIT P4: THE TRUE COPY OF THE ORDER DATED 20-12-2011 IN WPC NO. 32394/2011.

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EXHIBIT P5: THE TRUE COPY OF THE NOTIFICATION ISSUED BY THE 3RD RESPONDENT.

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EXT.P6: THE TRUE COPY OF THE G.O(MS)NO:29/2012/F&PD DT.13.4.2012 ISSUED BY THE 1ST RESPONDENT

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RESPONDENTS' EXHIBITS

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EXT.R6A: A TRUE COPY OF G.O(MS)NO:17/10/F&PD DT.18.3.2010

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EXT.R6B: -DO- OF THE CIRCULAR DT.29.6.2010 ISSUED BY THE SECOND RESPONDENT

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EXT.R6C: -DO- OF THE G.O.(MS)NO:29/2012/F&PD DT.13.4.2012

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EXT.R7A: THE TRUE COPY OF THE CERTIFICATE OF REGISTRATION ISSUED BY THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, MALAPPURAM DT.9.1.2012

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EXT.R7B: -DO- OF THE GOVERNMENT ORDER DT.13.4.2012

/TRUE COPY/

P.S.TO JUDGE

K. SURENDRA MOHAN, J.

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W.P(C) NOS:11010, 12187, 13490, 13861 and 15355 OF 2012

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Dated this the 17^th July, 2012.

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JUDGMENT

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The common dispute in these writ petitions concern the right to participate in the tender proceedings for the grant of the licence to dredge sand from within the limits of the Ponnani port area. As per Ext.P5 notification which is undated, the third respondent had invited sealed tenders from societies registered under the Kerala Co-operative Societies Act, 1969 formed by workers of the area, engaged in the collection of sand through traditional means. It has been notified in Ext.P5 that sealed tenders would be received in the office of the third respondent till 11 a.m on 9-5-2012 and that on 10-5-2012 at 11 a.m the tenders would be opened at the Port office at Kozhikode, in the presence of the tenderers.

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The petitioner in WP(C) No: 11010 of 2012 is a co-operative society registered under the Kerala Co-operative Societies Act, 1969 (the 'Act' for short). The petitioner society has not produced its bye laws. However, the name indicates that it is a society of workers of the coir industry. According to the petitioner, there was

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WPC 11010/2012 etc. 2

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an earlier notification Ext.P1 dated 18-3-2010 pursuant to which, Ext.P2 circular dated 1-3-2011 was issued by the Director of Ports. In both Exts.P1 and P2, there are clauses that restrict the eligibility for submitting tenders for being awarded the right to collect sand from the port limits, to co-operative societies of which at least 90% of the regular members are traditional dredging workers. The clause clarifies that the reference is to workers who make a living by actual dredging of sand by immersing themselves into the water and persons who are local permanent residents. Since the eligibility criteria has limited the right to participate in the tender proceedings to a particular category of societies alone, Exts.P1 and P2 were the subject matter of challenge before this Court in various writ petitions. The writ petitions finally ended in Ext.P3 judgment of the Division Bench in W.A.1354/2011. The connected writ petitions were also disposed of by the said judgment. According to the petitioner, as per Ext.P3 judgment it has been held that all labour societies should be treated as qualified to quote for the work since the purpose is to promote the business of workers' cooperative societies. Therefore, as per Ext.P3 it has been directed that all the societies should be treated as qualified, without any distinction as to whether they are sand mining workers or workers

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WPC 11010/2012 etc. 3

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engaged in other labour contracts. According to the counsel for the petitioner, in view of the above binding dictum of the Division Bench all types of societies without any differentiation as to the nature of the activities in which they are engaged, are entitled to participate in the tender proceedings notified by Ext.P1. Inasmuch as Ext.P1 confines the eligibility to a particular category of society alone, it is contended that the said notification is bad and liable to be set aside. The counsel also takes strong exception to the fact that Ext.P1 bears no date, which according to him is not an omission but a deliberate and calculated act, which shows that the same has been issued so as to over reach the directions of the Division Bench of this Court.

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This writ petition was admitted on 8-5-2012 and as per an interim order of the same date, Ext.P1 was stayed. Though I.A.6549/2012 was filed by the sixth respondent seeking to vacate the interim order of stay, as per order dated 24-5-2012 the said petition was dismissed. The order was the subject matter of challenge in W.A.972/2012. As per judgment dated 31-5-2012, the Division Bench disposed of the writ appeal directing the sixth respondent to move this Court for an early disposal of the writ petition. Accordingly, these writ petitions were heard together and

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WPC 11010/2012 etc. 4

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taken up for final disposal. Since the issues involved are identical, these writ petitions are considered and disposed of by this common judgment.

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Separate counter affidavits have been filed by the contesting respondents raising similar contentions. According to the sixth respondent, the said society is a society of traditional sand mining workers. It is pointed out that Ext.P5 tender notification has been issued pursuant to Ext.R6(c) Government Order dated 13-4-2012. Since the Government Order has restricted the eligibility to participate in the tender to a particular class of cooperative societies alone, it is contended that it is not open to the other categories of societies to insist that they should also be permitted to participate. Reference is made to Rule 180 of the Kerala Co-operative Societies Rules, 1969 to contend that it is not open to societies engaged in other fields of activity to undertake activities that are not permitted by their bye laws. It is contended that the bye laws of the societies like the petitioner herein do not authorise the society to engage in sand mining. It is pointed out that no sanction of the Registrar has also been obtained for carrying out any such activity. For the above reasons it is contended that the petitioner is not eligible to participate in the

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WPC 11010/2012 etc.

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tender, as notified by Ext.P5. He therefore seeks disposal of the writ petition.

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The counsel for the additional seventh respondent also supports the sixth respondent substantially and contends that the petitioner society does not have any right to claim permission to participate in the tender process for the reason that the said society is not qualified for the same. The counsel for the additional 12^th respondent also supports the above contention though he represents a society that was formed much after the last date for submission of tenders had expired.

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Writ petition 12187/2012 is another writ petition filed seeking similar reliefs. The petitioners in the said writ petition are societies of fishermen. According to the petitioners herein one of the main objectives of the said societies is to engage in manual dredging of sand within the Ponnani port. In this writ petition, the petitioners have challenged Ext.P5 Government Order also.

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WP(C)15355/2012 and WP(C)13490/2012 are filed by societies registered on 14-5-2012 and 1-6-2012. The last date for submission of tenders as per Ext.P5 was 9-5-2012. Therefore, these societies were registered after the last date stipulated by Ext.P5. WP(C)13861/2012 is a Coir Workers Co-operative Society.

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WPC 11010/2012 etc.

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In this writ petition also Ext.P5 Government Order has been challenged.

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No counter affidavits have been filed in the above three writ petitions. However, since the issues raised are explained in the counter affidavits filed in the other writ petitions, it is agreed by all that they can also considered together.

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In WP(C)11010/2012 a counter affidavit has been filed on behalf of respondents 1,2 and 3. The Port Conservator has sworn to the counter affidavit. According to the counter affidavit, there is widespread sedimentation within the Ponnani Port limits leading to the formation of large deposits of sand and sand beds that cause threat to the vessels using the port. Accidents and loss of life have occurred frequently in the past, necessitating the Government to think of methods to remove the sand deposits. It was in the above context that permission was decided to be granted to co-operative societies engaged in the mining of sand employing the traditional means. For the said purpose, each year notifications are issued and on the basis of such notifications permission is granted to various co-operative societies to engage in the mining of sand. Such mining of sand has not only served to enhance the safety of the port but has also been a source of substantial Revenue for the

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WPC 11010/2012 etc. 7

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State. According to the counter affidavit, the Government has been earning an amount of `2 crores every month. A copy of the Government Order Ext.P5 issued for the above purpose has been produced along with the counter affidavit as Ext.R3(a).

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It is the contention of the third respondent that the said Government Order has been issued after a tender evaluation committee had allotted different Zones for manual dredging works, following proper procedures. Ext.P5 Government Order has been issued not with respect to Ponnai Port alone but is applicable to all the five ports in the State. Therefore, it is contended that the Government have been following a uniform policy of restricting the eligibility criteria to those co-operative societies engaged in manual dredging of sand employing traditional means. For the above reason, it is contended that Ext.P5 may not be considered keeping in mind only the peculiar conditions that exist in Ponnani and the limits of Ponnani port. It is also pointed out that by the operation of the interim order of stay in the present case, the tender proceedings are held up resulting in substantial loss of Revenue to the State, apart from income to the eligible co-operative societies. The persons who had submitted their tenders have produced demand drafts for an amount of `25,000/- (Rupees twenty five

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WPC 11010/2012 etc.

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thousand only) each along with their tenders which are also remaining in sealed packets. For the above reasons, the learned Special Govt. Pleader submits that these writ petitions may be dismissed.

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Adv. Joby Jose Kondondy, the counsel for the sixth respondent points out, with special reference to Ext.P3 judgment of the Division Bench that, the situation that was taken note of by the Division Bench does not survive at present. At the time of filing of the said writ petitions, societies engaged in traditional sand mining works were not many and therefore other categories of societies were also permitted to submit tenders. The learned Special Govt. Pleader also supports the above contention by pointing out that the situation that was prevalent at that time has substantially changed with the formation of new societies during the interregnum period. For the above reason, it is contended that it is not necessary in the present situation to permit ineligible societies to participate in the tender process. Therefore, the solution that was worked out by Ext.P3 judgment does not have any application to the situation that is prevailing at present, it is submitted.

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I have heard Adv.K.B.Arun Kumar, Adv.Siju.K, Adv.Shoby K.Francis, Adv.Sreekumar G who appear for the petitioners in the

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WPC 11010/2012 etc. 9

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various writ petitions as well as Adv. Joby Jose Kondody for the sixth respondent, Adv.C.M.Muhammed Iqubal for the additional seventh respondent and the Special Government Pleader Shri. D.Somasundaram, at length. I have considered the rival contentions advanced before me, anxiously.

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WP(C)11010/2012 is treated as the leading case and references to the exhibits are to the exhibits in the said writ petition. The respondents are also referred to in the order in which they are arrayed in the said writ petition.

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As noticed above, a number of writ petitions had been filed in the year 2011 complaining of various discrepancies in the manner of award of contract for mining of sand from the Ponnani port limits. The disputes culminated in Ext.P3 judgment of the Division Bench dated 29-9-2011. After considering the situation that was prevailing at that time the Division Bench noticed that though the eligibility criteria stipulated by the tender conditions were different, contracts had been awarded to different categories of societies like Milk Producing Societies, Sand Trading Societies etc. Therefore, this Court directed that a solution could be worked out by treating every labour society as being qualified to quote for the work. Accordingly, this Court directed that all the societies

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WPC 11010/2012 etc.

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should be treated as qualified. This Court has observed as follows, concluding the issue in paragraph 2 of the judgment:-

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“Since the highest rate quoted applies to everybody, we feel what is required is to allot the mining area in an equitable manner so that every society gets some portion of the work, if possible depending on number of workers of the society. Since the allotment of work is not done in a fair and reasonable manner i.e by eliminating some societies without stating any reason whatsoever and by accepting contract of some of the societies and since one more Zone is yet to be auctioned, we feel the entire matter requires reconsideration. Accordingly we cancel the allotment of Zones 12,13 and 14 and direct fresh award of contract to the eligible societies but by accepting the highest bid of Rs.960/- offered along with taxes to avoid further controversy.”

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As per Ext.P3, the matter was entrusted to the District Collector, Malappuram who was directed to find out a solution with regard to the allotment of the area for mining to all eligible societies, in coordination with the officials of the Port and other concerned Departments. The District Collector was also authorized to split up the zones further so as to enable each society to get a due share of the work. It cannot be said from a reading of the said judgment that this Court was laying down a permanent solution for the

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WPC 11010/2012 etc.

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problem, to be followed continuously, year after year. It is clear that the Division Bench was only trying to resolve the problem that was thrown up by the cases that were decided, temporarily. It is not in dispute that in accordance with the solution worked out by the District Collector for the said year, the right to collect sand was granted to the various societies. It is also not in dispute that the said term has expired. It is in the said circumstances that the present G.O.Ext.R6(c) and the notification, which is Ext.P5 in WP(C) 11010/2012, has been issued. I notice that the District Collector is no longer in the picture as far as Exts.P5 and R6(a) are concerned and it is the Port authorities themselves who are exercising the power to award tenders. It is therefore clear that the observations in Ext.P3 judgment were not intended to be followed permanently, year after year. For the above reasons, there cannot be any doubt that the Division Bench was only stipulating the manner in which the procedure for the award of tenders was to be handled by the authorities in those cases for that particular year. It is also worth noticing that in Ext.P3, neither the Government order nor the circular was set aside. The present Government Order Ext.R6(c) as well as the notification Ext.P5 are worded more or less on the same lines as Exts.P1 and P2. It is true that the eligibility to quote for the

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WPC 11010/2012 etc.

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right to mine sand is limited to certain categories of societies only. The above aspect has also been noticed by the Division Bench in Ext.P3. It is for the said reason that the Division Bench has made the following observations in paragraph 2 thereof:-

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“After hearing all sides what we notice is that none of the societies exactly fit in to the eligibility criteria laid down in the tender conditions which provides for award of contract only to societies formed with sand mining workers. The object of such society should be sand mining work. However, it is seen that contract is awarded to Milk Producing Societies, Sand Trading Societies, Labour Contract Society and one of the petitioners in these cases is a Fishermen's Co-operative Society. Probably there may not be societies exclusively formed with sand mining workers and that could be the reason why no such society has quoted for the work. We feel a solution could be reached by treating every Labour Society to be qualified to quote for the work because the purpose is to promote the business of workers' co-operative societies.”

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Therefore, in Ext.P3, though it was noticed that the other categories of societies were not eligible to quote for the work, they were permitted to participate in the tender proceedings only for the purpose of working out a solution for the problem that was taken note of by the Division Bench. Ext.P5 in the present case is a

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WPC 11010/2012 etc.

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composite Government Order that applies to all the five ports in the State. It contains a uniform criteria that has been adopted for the purpose of being applied to all the ports in the State. The object of limiting eligibility to only those societies formed by workers who are engaged in mining sand employing traditional methods is to ensure the availability of work for such workers and also to ensure efficiency in the conduct of the dredging work. This is for the reason that the work of sand mining through traditional methods is a specialised work that is available only at limited places that too, seasonally. It cannot be said that the said clause limiting the eligibility criterion to only those societies is bad.

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It is also to be noted that Rule 180 of the Kerala Cooperative Societies Rules, 1969 ('Rules' for short) limits the power of a society to engage in activities not authorised by its bye laws. Rule 180 reads as follows:-

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“180. Societies not to act without previous sanction of Registrar in certain matters :-- No society shall do any act which is not expressly provided for by the bye-laws of such society without the previous express sanction of the Registrar for the same.”

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The above rule stipulates that any activity that the society wants to engage in would have to be authorised by the bye laws or should be

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WPC 11010/2012 etc. 14

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sanctioned by the Registrar. It is not clear whether the petitioners in these cases have satisfied the mandate of Rule 180 of the Rules. The said aspect would have to be looked into by the authorities while considering the tenders submitted by them. I am not able to go into the above question for the reason that the bye laws of the societies who are petitioners before me are not produced.

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As noticed earlier it is in a situation where the number of societies that fit into the eligibility criteria stipulated by the notification were unavailable that this Court permitted the other societies to participate, in spite of their inability to satisfy the eligibility criteria. The said consideration applies even to the present tender. If the number of societies that fully satisfy the eligibility criteria stipulated by Ext.R6(c) and Ext.P5 are unavailable the authorities would certainly have to abide by the directions in Ext.P3 and permit the other societies including the petitioners herein to participate, in spite of their ineligibility. This is especially so in view of the fact that that they were permitted to participate by Ext.P3 and their competence in discharging their commitments are beyond dispute, not having given rise to any complaints from any quarter.

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It therefore follows that the societies that do not satisfy

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WPC 11010/2012 etc.

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the eligibility criteria stipulated by Exts.P5 and R6(c) cannot claim a right to submit tenders or to stake a claim to the right of being granted permission to collect sand from the limits of Ponnani Port. Only those societies who satisfy the eligibility criteria are entitled to submit tenders and compete in the award of permission for collection of sand from the Ponnani Port area. However, since the areas from which sand is permitted to be collected have been designated as different zones by the authorities, if sufficient number of qualified societies are not available for being granted the permission, it shall be open to the authorities to follow the procedure that has been stipulated by Ext.P3 judgment of this Court. The societies who have not submitted tenders within the time stipulated by Ext.P5 notification for submitting such tenders shall not be entitled to submit fresh tenders. They will have to wait for the notification of the next year. The above applies with equal force to the case of new societies that were formed after the last date for submission of tenders had expired. Therefore, only those societies who have submitted tenders before the expiry of the last date stipulated by Exts.P5 and R6(c) notification alone are required to be considered at present. The authorities shall be free to open the tenders, evaluate the eligibility of the various tenderers and to

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WPC 11010/2012 etc.

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award the permission to collect sand to the societies that are eligible, in accordance with the above observations.

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For the foregoing reasons:-

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i) WP(C) 15355/2012 and 13490/2012 are dismissed.

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ii) WP(C)11010/2012, 12187/2012 and 13861/2012 are disposed of directing respondents 3 and 4 to conduct the auction notified as per Ext.P5 tender notification in accordance with the stipulations contained in Exts.P5 and R6(c). In the event of nonavailability of sufficient number of tenderers satisfying the eligibility criteria stipulated by Exts.P5 and R6(c), the procedure laid down by the Division Bench in Ext.P3 judgment may be followed, in which event, the tenders submitted by the petitioners in these writ petitions would also have to be considered.

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Ordered accordingly.

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Sd/K. SURENDRA MOHAN Judge

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jj /True copy/

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P.S.to Judge

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WPC 11010/2012 etc. 17

Ezhvathuruthy Kayar Vyavasaya Sahakarana Sangam v. the State of Kerala

Case brief

What is this about?

What did the court decide?

Ezhvathuruthy Kayar Vyavasaya Sahakarana Sangam v. the State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

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