Dismissed

E.N.Muraleedharan Nair v. State of Kerala

Kerala HC21 Jul 2014WP(C)/10838/2012

Case brief

AI extract

What is this about?

This judgment dismisses two writ petitions. The High Court rejected the petitioner's claim for a contract award after a preferred bidder defaulted, holding that unsuccessful tenderers cannot demand negotiation or that courts cannot interfere with administrative discretion to re-tender. The termination dispute was remitted to the Civil Court.

What did the court decide?

The writ petitions filed for direction to award work and challenge termination are dismissed.

E.N.Muraleedharan Nair Vs State of Kerala — Public Procurement and Tenders | Kerala HC (2014)

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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 A.M.SHAFFIQUE

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MONDAY, THE 21ST DAY OF JULY 2014/30TH ASHADHA, 1936

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WP(C).No. 10838 of 2012 (D)

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PETITIONER(S):

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1. E.N.MURALEEDHARAN NAIR, MANAGING PARTNER, LIFE LINE FILM MAKERS, T.C.4/2598-1, SREE NANDANAM, KRA-A28, MARKET ROAD, KURAVANKONAM, TRIVANDRUM, PIN 695003.

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2. S.RAJEEV,

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PROPRIETOR MEDIA CITY, T.C.26/2130-1, TUTORS LANE, TRIVANDRUM, PIN 695001.

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BY ADV. SRI.THOMAS ABRAHAM

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RESPONDENT(S):

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1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY, SPORTS DEPARTMENT, GOVERNMENT OF KERALA, SECRETARIAT, TRIVANDRUM-695001.

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2. NATIONAL GAMES SECRETARIAT, CHANDRASEKHARAN NAIR STADIUM, PALAYAM, TRIVANDRUM, PIN 695033, REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER AND SECRETARY.

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3. M/S.PRICE WATERHOUSE COOPERS PVT.LIMITED, BUILDING 8, TOWER B, 8TH FLOOR, DLF CYBER CITY, GURGAON, PIN 122022, REPRESENTED BY ITS MANAGING DIRECTOR.

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4. M/S NTV,

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TUTORS LANE, TRIVANDRUM, PIN 695001 REPRESENTED BY ITS PROPRIETOR SRI.ELIAS JOHN.

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*** ADDL.R5 IS IMPLEADED**

...2/-

..2..

WP(C).No. 10838 of 2012 (D)

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5. KERALA STARTE FILM DEVELOPMENT CORPORATION LTD., CHALACHITHRA KALABHAVAN, VAZHUTHACAUD, THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING DIRECTOR.

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IS IMPLEADED AS ADDL.R5 AS PER ORDER DATED 8/1/2014 IN IA.10069/2013.

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R1 BY SENIOR GOVERNMENT PLEADER SRI.SOJAN JAMES R2 BY ADVS. SRI.SREELAL N.WARRIER SRI.B.RAGHUNANDANAN SRI.C.DILIP R4 BY ADVS. SRI.NAGARAJ NARAYANAN SRI.SAIJO HASSAN SRI.BENOJ C AUGUSTIN SRI.I.J.AUGUSTINE SRI.SEBIN THOMAS SMT.J.KASTHURI SRI.PRATHAP PILLAI SRI.SWATHY DAS

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RADDL.5 BY ADV. SRI.A.SUDHI VASUDEVAN, SC, KSFDC

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12-06-2014 ALONG WITH WPC. 1142/2013, THE COURT ON 21-07-2014, DELIVERED THE FOLLOWING:

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WP(C).No. 10838 of 2012 (D)

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APPENDIX

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PETITIONER(S) EXHIBITS

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-------------------------------------

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EXHIBIT-P1. TRUE COPY OF THE OFFICIAL PUBLICATION OF THE 2ND RESPONDENT WHICH ELUCIDATE THE OBJECTIVES OF NGS.

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EXHIBIT-P2. TRUE COPY OF THE RFP NOTICE NO.1965/GA/10/NGS.

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EXHIBIT-P3. TRUE COPY OF THE TABULATED TECHNICAL EVALUATION DETAILS.

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EXHIBIT-P4.COLLECTIVELY: TRUE COPIES OF THE 3 FINANCIAL BIDS.

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EXHIBIT-P5. TRUE COPY OF THE BID EVALUATION REPORT.

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EXHIBIT-P6. THE TRUE COPY OF THE REPRESENTATION DATED 5.7.2011 SUBMITTED BY THE PETITIONERS.

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EXHIBIT-P7. THE TRUE COPY OF THE REPRESENTATION DATED 2.2.2012 ADDRESSED TO THE MINISTER FOR SPORTS, STATE OF KERALA.

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EXHIBIT-P8. THE TRUE COPY OF THE REPRESENTATION DATED 3.4.2012 SUBMITTED BY THE PETITIONERS.

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EXHIBIT P9. COPY OF THE LETTER DATED 27/12/11 SENT BY NGS TO THE 4TH RESPONDENT CONTRACTOR

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EXHIBIT P10. COPY OF THE LETTER DATED 14/2/12 SENT BY NGS TO THE 2ND RESPONDENT TO THE 4TH RESPONDENT.

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EXHIBIT P11. COPY OF THE LETTER DATED 17/1/12 THE ISSUED BY THE 2ND RESPONDENT TO THE 4TH RESPONDENT

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EXHIBIT P12. COPY OF THE COMMUNICATION DATED 13/6/12 SENT UNDER RTI ACT.

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EXHIBIT P13. COPY OF THE DOCUMENT SIGNED BY NGS AUTHORITIES

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EXHIBIT P14. COPY OF THE COMMUNICATION DATED 20/7/13 CONTAINING THE QUESTIONS SUBMITTED BY THE PETITIONER UNDER RTI ACT

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EXHIBIT P15. COPY OF THE COMMUNICATION DATED 17/8/13 FURNISHING THE ANSWERS.

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EXHIBIT P16. COPY OF THE COMMUNICATION DATED 6/9/13 FROM THE APPELLATE AUTHORITY

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EXHIBIT P17. COPY OF THE COMMUNICATION DATED 4/3/11 SENT BY KSFDC TO NGS

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PJ ...2/-

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..2..

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WP(C).No. 10838 of 2012 (D)

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EXHIBIT P18. COPY OF THE REPLY LETTER DATED 21/3/11 SENT BY NGS TO KSFDC

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EXHIBIT P19. COPY OF THE COMMUNICATION DATED 2/4/12 SENT BY KSFDC TO NGS

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RESPONDENTS' EXHIBITS

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EXHIBIT R4(A): COPY OF THE LIST OF WORK SCHEDULING THE WORK DONE BY THE 4TH RESPONDENT

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EXHIBIT R4(B): COPY OF THE LIST SCHEDULING THE CAMERA CREW OF THE 4TH RESPONDENT RELEVANT DATES OF WHICH THEY WORKED AND THE OFFICIALS OF THE 2ND RESPONDENT ON THE RELEVANT DATES AND THE SITE AND THE OBSTRUCTION AND THE REMARKS.

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EXHIBIT R5(A): COPY OF THE CIRCULAR DT.31/10/95 ISSUED BY GOVERNMENT OF KERALA.

/ TRUE COPY /

P.S.TO JUDGE

A.M.SHAFFIQUE, J

*** * * * * * * * * * * * *** W.P.C.No.10838 of 2012 & 1142 of 2013

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Dated this the 21^st day of July 2014

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J U D G M E N T

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W.P.C.No.10838/2012 is filed for a direction to

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respondents 1 and 2 to award the contract in favour of the petitioner Consortium. The work relates to video documentation of the Pre-Event Preparation of the 35^th National Games - 2012.

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The facts as disclosed would indicate that Kerala State was hosting the 35^th National Games, 2012. The 2^nd respondent, a Society was acting as an interface between Government of India, Indian Olympic Association (IOA), State Government, Kerala Olympic Association (KOA), Kerala State Sports Council and other Sports Federations at national level. The 2^nd respondent invited request for proposal for selecting an agency for video documenting the Pre-Event Preparation of National Games. After evaluating

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W.P.C.Nos.10838 of 2012 2 & 1142 of 2013

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the bids received, the work was awarded in favour of the 4^th respondent. But they did not carry out the work. According to the petitioner, when the 4^th respondent did not carry out the work, respondents 1 and 2 ought to have called upon the other bidders for a negotiation and ought to have awarded the work to them on finalisation of the bid amount. Instead of that, the respondents did not take any action in the matter and hence the petitioners had sought for the aforesaid relief.

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Counter affidavit is filed by the 1^st respondent inter

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alia stating that the contract was awarded to the 4^th respondent whose financial quote was the lowest. It is contended that the selection process was done in a transparent manner and in the presence of bidders. Moreover, the technical capacity of the bidders were verified by the technical agency.

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Counter affidavit is filed by the 4^th respondent, successful tenderer, supporting the stand taken by respondents 1 and 2. However, they contended that

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W.P.C.Nos.10838 of 2012

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& 1142 of 2013

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despite the award of work, their contract was terminated as per letter dated 14/03/2012 and they have challenged the termination by filing separate writ petition as W.P.C. No.1142/2013.

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In W.P.C.No.1142/2013, the 4^th respondent in W.P.C No.10838/2012 is the petitioner who challenges Ext.P5 letter dated 14/02/2012 by which the work awarded in their favour was cancelled. It is inter alia stated in Ext.P5 as under:

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“This is in follow up to the notice issued from this Office vide reference cited 3^rd and the subsequent letter vide reference 5^th in response to your reply received vide reference 4^th above.

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It is observed that despite the show cause notice and frequent reminders by NGS to provide explanation towards your failure to comply with the terms and conditions of RFP, your Agency has failed to provide any satisfactory explanation and take corrective action in this regard.

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Accordingly, NGS has decided to withdraw the Letter of Intent (LoI) dated 17/08/2011 issued to your Agency vide reference 2^nd with immediate

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W.P.C.Nos.10838 of 2012 & 1142 of 2013

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effect. NGS retains its rights to invoke the provision of Risk Purchase under Clause 5.4 of the RFP referred 1^st whereby we may procure, services similar to those undelivered, and your Agency shall be liable to reimburse NGS for any excess costs incurred for such similar services.”

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According to them, there is no justification in cancelling the contract especially when they have done substantial work.

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During the pendency of the aforesaid writ petitions, petitioner in W.P.C.No.10838/2012 has impleaded Kerala State Film Development Corporation Ltd. inter alia contending that without calling them for negotiation, respondents 1 to 3 have unilaterally awarded the said work to additional 5^th respondent. Sri.Thomas Abraham, learned counsel for the petitioner relied upon judgments of this Court in M/s.United Umbrella Mart v. State of Kerala and Others [2005(2) ILR (KER) 314] wherein this Court having referred to long line of judgments including Ramana

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Dayaram Shetty v. International Airport Authority of

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W.P.C.Nos.10838 of 2012

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& 1142 of 2013

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India [(1979) 3 SCC 489] held that when the State enters into a contract with a person, it must do so fairly without discriminating and following a fair procedure. It is also held that they cannot act arbitrarily and grant any largesse violating the procedure and mandates of Article 14 of the Constitution of India.

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Heard the learned counsel for the petitioners in both cases and the Learned counsel for the respondents.

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The short question involved in W.P.C.No.10838/2012 is whether petitioners having locus standi to insist that they should be awarded the work. The writ petition is filed by a Consortium who had participated in the tender and their demand is that the work should be awarded in their favour as the other bids are not legally sustainable. They also challenged the award of work in favour of the 4^th respondent. First of all, the award in favour of the 4^th respondent cannot be challenged merely on the ground that the petitioners feel that their rates are unworkable. Apparently, the 4^th respondent was technically

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W.P.C.Nos.10838 of 2012 & 1142 of 2013

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qualified and their rates were the lowest. Whether they could have done the work at that rate or not were matters which ought to be verified by the awarder of the work. If the 2^nd respondent proceeded on the basis that the lowest among the tenderers should be awarded the work, this Court cannot interfere with the said decision. As held in the judgment in M/s.United Umbrella Mart ’s case (supra), this Court cannot substitute its reasons in the matter of finalisation of contract. When the contract is finalised in favour of the 4^th respondent, this Court cannot sit in judgment on the mere allegation of the petitioner that the rate of the 4^th respondent was unworkable.

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The 4^th respondent, having done some preliminary works, did not continue the same, as a result of which their work order was terminated. Petitioner has a case that once the work of the 4^th respondent was terminated, the other bidders should be called for negotiation and thereafter the work should be awarded. There is no basis for such a contention. It is still within the realm of discretion of the

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W.P.C.Nos.10838 of 2012 & 1142 of 2013

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awarder of work to decide whether they should call upon the other bidders for negotiation or whether they should go for re-tender or whether they should engage any other agency to carry on the work. Petitioner, who is an unsuccessful tenderer, has no right to demand that he should be called for negotiation. Hence the petitioner is not entitled for any of the reliefs, as sought for and the writ petition is liable to be dismissed.

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Learned counsel for the petitioners however projected another cause by contending that the additional 5^th respondent was granted the contract for the entire work without complying with any tender procedure. First of all, there is no challenge regarding the work entrusted to the additional 5^th respondent. Secondly, the additional 5^th respondent has relied upon a Government Circular dated 31/10/1995 by which all the Heads of Departments, Educational Institutions, Public Sector Undertakings/Boards and Institutions having 51% or more of State share to finalise their proposal for producing films or video films only

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W.P.C.Nos.10838 of 2012 & 1142 of 2013

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after consultation with additional 5^th respondent and the work should be entrusted to them alone. Under such circumstances, there is nothing wrong in the State giving the said work to be completed by additional 5^th respondent. KSFDC is also an arm of the Government and there is nothing wrong in the Government nominating such an agency to carry out the above work especially when the awardee failed to perform the work in accordance with the contractual provisions

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In respect of W.P.C.No.1142 of 2013, the petitioner challenges the termination of a contract. First of all, perusal of Ext.P5 indicates that the contract was terminated when it was found that the petitioner failed to perform the terms of the contract. It is also indicated that sufficient opportunity had been granted to perform the contract. But still, the petitioner failed to carry out the promises and since the matter required urgent attention, the contract had to be cancelled. The petitioner challenges the reasons for cancellation of the contract and according to them they

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W.P.C.Nos.10838 of 2012 & 1142 of 2013

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have complied with the terms of contract. This dispute, essentially, is a matter which cannot be resolved on the basis of affidavits in a writ petition under Article 226 of the Constitution of India. If at all the petitioner requires to challenge Ext.P5, the same has to be done by initiating appropriate proceedings before a Civil court and therefore an adjudication on the validity of termination order cannot be considered by this Court.

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In the result, both these writ petitions are dismissed, however reserving the rights of the petitioner in W.P.C.No.1142 of 2013 to challenge Ext.P5 by approaching the Civil Court, if so advised.

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(sd/-)

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(A.M.SHAFFIQUE, JUDGE)

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jsr

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W.P.C.Nos.10838 of 2012 10 & 1142 of 2013

E.N.Muraleedharan Nair v. State of Kerala

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E.N.Muraleedharan Nair v. State of Kerala

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