Dismissed

Kollam Progressive Labour Contract Co-Operative Society Ltd. v. State of Kerala

Kerala HC9 Oct 2013WP(C)/20673/2013

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed a writ petition challenging the denial of a 10% price preference margin available to Co-operative Societies in tenders funded by Central Government funds. The Court distinguished State-funded from Central-funded tenders, ruling that the new Government Order applicable to the latter could not be challenged solely because the tender notification preceded it.

What the court decided

AI extract

Kollam Progressive Labour Contract… — Contract and Commercial Disputes | Kerala HC (2013)

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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 P.R.RAMACHANDRA MENON

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WEDNESDAY, THE 9TH DAY OF OCTOBER 2013/17TH ASWINA, 1935

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WP(C).No. 20673 of 2013 (H)

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PETITIONER :

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KOLLAM PROGRESSIVE LABOUR CONTRACT CO-OPERATIVE SOCIETY LTD. NO.1231, REPRESENTED BY ITS PRESIDENT,C.Y.NISAN S/O.YASIFF KUTTY, KUTTIYIL VEEDU, VENGA P.O., SASTHAMCOTTA, KOLLAM DISTRICT.

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BY ADV. SRI.VINOY VARGHESE KALLUMOOTTILL

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RESPONDENT(S):

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1. THE STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, PUBLIC WORKS DEPARTMENT, SECRETARIAT,

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THIRUVANANTHAPURAM-695 001.

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2. EXECUTIVE ENGINEER,

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ROAD DIVISION, KOLLAM-691 001.

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3. Y. SHAJAHAN,NIZAR MANZIL, VADAKKUMTHALA P.O., KARUNAGAPALLY,

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KOLLAM DISTRICT-691 001.

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R1 & R2 BY SR GOVERNMENT PLEADER SRI. JOSEPH GEORGE

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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sts

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WP(C).No. 20673 of 2013 (H)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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P1: COPY OF THE NOTIFICATION DATED 1.7.2013 PUBLISHED BY THE 2ND RESPONDENT.

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P2: COPY OF THE REPRESENTATION SUBMITTED BEFORE THE 2ND RESPONDENT.

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P3: COPY OF THE ORDER DATRED 17.7.2013 ISSUED BY 1ST RESPONDENT.

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RESPONDENT(S)' EXHIBITS:

NIL

/TRUE COPY/

P.A.TO.JUDGE

sts

P.R. RAMACHANDRA MENON, J.

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========================

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W.P.(C). No. 20673 of 2013

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-------------------------------------------Dated this the 9th day of October, 2013

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JUDGMENT

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The petitioner Society has approached this Court with the following prayers:

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“i. Call for the records relating to Ext.P1 to P3 and issue a writ or appropriate direction to the respondents 1 and 2 not to deny the preferential benefits to the petitioner's society relying on Ext.P3 order dated 17.7.2013 and declare that Ext.P3 order has no overrding effect on Ext.P1 tender notification

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ii. To issue a writ or appropriate direction in the nature of writ of mandamus to the 2^nd respondent not to enter into any agreement with 3^rd respondent to execute the work stated in serial number 50 and 51 in Ext.P1 tender notification in which the petitioner submitted the tender.

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iii. To issue a writ or appropriate direction to the 2^nd respondent to award the work to the petitioner's society as per the stipulation in Ext.P1 tender notification.”

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The crucial question to be considered in this case is whether the petitioner Co-operative Society is entitled to have the benefit of 'margin' with regard to the rate to be quoted in

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W.P.C. No. 20673 of 2013 -2-

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participating the tenders, to the extent as stipulated in G.O.(MS) No. 135/97 dated 13.11.1997. By virtue of the above G.O, Societies like the petitioner are entitled to have the work awarded, even by 10% below the rate quoted by the other individuals, who stand on a better footing with regard to the rates quoted. This benefit, which was being enjoyed for more than one decade, has been taken away by virtue of Ext.P3 G.O stating that, the same is not applicable in the case of centrally funded projects, making use of the funds allotted by the Central Government/Institutions. This in turn is under challenge in this writ petition.

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The learned counsel for the petitioner submits that, Ext.P3 G.O has been issued by the Local Self Government Department, in supersession of the earlier G.O dated 13.11.1997, which was issued by the Co-operative Department.

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Heard the learned Government Pleader appearing for the respondents, who points out with reference to the counter affidavit filed, that the tenders floated by the respondents making use of the centrally alloted funds stand entirely on a different footing. The specific case of the respondents as projected in

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W.P.C. No. 20673 of 2013 -3-

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paragraphs 2 and 3 is as follows:

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“2. It is respectfully submitted that Ext.P1 Tender Notification was issued inviting competitive bids in respect of 69 items of works. The funds for the above mentioned work was provided by the Government of India from the 13^th Finance Commission grant. As per G.O.(MS) 135/97/Co-op dated 13.11.1997 price preference was given to Labour Contract Co-operative Societies in respect of the works tendered by the Public Works Department. But the Central Government is not willing to bear the additional expense due to the price preference given to Labour Contract Co-operative Societies. Earlier the department of Fisheries and Harbour Engineering issued G.O.(Rt) No. 255/04/F&PD by stopping the practice of granting 10% price preference to the Labour Contract Co-operative Societies in respect of works arranged with the aid of Central Government Fund.

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It is hereby submitted that Ext.P1 Tender Notification was issued on 01.07.2013. Subsequently on 17.07.2013, Government issued Exhibit P3 Government Order by abolishing the practice of granting 10% price preference to the Labour Contract Co-operative Societies for the works tendered by the Public Works Department. In the light of the issuance of Exhibit P3, the 2^nd respondent is duty bound to follow Exhibit P3 Government Order while opening the tender dated 2.08.2013.”

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It is pointed out that, the petitioner quoted 10.14 %

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W.P.C. No. 20673 of 2013 -4-

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below the estimate rate, while the 3rd respondent quoted 19.91% below the estimate rate in respect of the work mentioned as item No. 51 in Ext.P1. By virtue of Ext.P3 G.O, the claim of the petitioner is not liable to be entertained, submits the learned Government Pleader.

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After hearing both the sides, this Court finds that there is wide distinction between the tenders which are being floated by the State Government/Departments on their own and the tenders which are being floated at the instance of the Central Government/Institutions, making use of the centrally allotted funds. If any such concession is to be given as claimed by the petitioner Society, this naturally involves much loss/drainage of public money and the Central Government may not be there to enshoulder such liability, with reference to the concerned G.O issued by the Co-operative Department of the State. However, taking note of the submission made by the learned counsel for the petitioner doubting the correctness and sequence of events leading to the G.O., this Court leaves it open for the petitioner to approach the appropriate Government for appropriate reliefs. This Court also finds that, merely for the reason that a tender

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W.P.C. No. 20673 of 2013 -5-

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notification was issued by the respondents on 01.07.2013 i.e prior to the date of Ext.P3 G.O by itself cannot come to the rescue of the petitioner. On the relevant date of considering the credentials, the field was governed by Ext.P3 and as such, the course pursued cannot be declared as arbitrary or illegal in any manner.

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Interference is declined and the writ petition is dismissed accordingly.

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P.R. RAMACHANDRA MENON, JUDGE.

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kp/-

Kollam Progressive Labour Contract Co-Operative Society Ltd. v. State of Kerala

Case brief

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Kollam Progressive Labour Contract Co-Operative Society Ltd. v. State of Kerala

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