Dismissed

M/S.Anchor Structurals v. the Kerrala State Electricity Board Limited

Kerala HC6 Dec 2017WA/2340/2017

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed a writ appeal filed by a contractor challenging the scrapping of rival bids due to a bank's technical failure in processing payment details. The court upheld the Single Judge's decision that the delay was not the tenderers' fault and noted that the rival bidders offered lower rates.

What did the court decide?

The writ appeals were dismissed upholding the judgment of the learned Single Judge.

M/S.Anchor Structurals Vs the Kerrala State… — Public Procurement and Tenders | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE ACTING CHIEF JUSTICE MR.ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU

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WEDNESDAY, THE 6TH DAY OF DECEMBER 2017/15TH AGRAHAYANA, 1939 WA.No.2340 of 2017 IN WP(C)35558/2017 --------------------------------------AGAINST THE JUDGMENT IN WP(C) 35558/2017 of HIGH COURT OF KERALA DATED 20-11-2017

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APPELLANT/PETITIONER IN WPC:

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M/S.ANCHOR STRUCTURALS ENGINEERS & CONTRACTORS, ELOOR HOUSE, KOLENCHERY.P.O., ERNAKULAM-682 311, REPRESENTED BY ITS MANAGING PARTNER- DR.SASI ELOOR. BY ADVS.SRI.K.L.VARGHESE (SR.) SMT.SANTHA VARGHESE SRI.RANJITH VARGHESE SRI.RAHUL VARGHESE

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RESPONDENTS/RESPONDENTS IN WPC:

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THE KERRALA STATE ELECTRICITY BOARD LIMITED VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM- 695 004 REPRESENTED BY THE SECRETARY 2. THE CHIEF ENGINEER (SCM) THE KERRALA STATE ELECTRICITY BOARD LIMITED VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM- 695 004 3. M/S.GAUTAM CEMENT WORKS NO.9 & 10 , SURANA HOUSE SIVANANDAM COLONY, KORATTUR, CHENNAI- 600 080 4. M/S. JYOTHI CONSTRUCTION CO. JYOTHI BUILDING, MAIDAN ROAD, MANGALORE- 575 001. R3 BY ADV. SRI.BOBY MATHEW R3 BY ADV. SMT.K.MEERA R4 BY ADV. SRI.K.JAJU BABU (SR.) R4 BY ADV. SMT.M.U.VIJAYALAKSHMI R4 BY ADV. SRI.BRIJESH MOHAN R BY SRI.GEORGEKUTTY MATHEW, SC, KSEB

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 06-12-2017, ALONG WITH WA. 2363/2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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ANTONY DOMINIC, Ag.C.J. & DAMA SESHADRI NAIDU, J.

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

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Writ Appeal Nos.2340 & 2363 of 2017

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 6^th day of December, 2017

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JUDGMENT

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Antony Dominic, Ag.C.J.

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These appeals are filed by the petitioners in W.P.(C) Nos.35558/17 and 35673/17 aggrieved by the common judgment rendered by the learned Single Judge dismissing the writ petitions. For convenience, we will refer to the documents that are available in W.A.2340/17 arising from W.P.(C) No.35558/17.

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Briefly stated, the facts of the case are that the Kerala State Electricity Board invited tenders for the supply of PSC poles for various electrical circles in the North Malabar region for a period of two years. Ext.P2 contains the pre-qualification bid and Ext.P3 contains the general terms and conditions of the tender. Reading of Exts.P2 and P3 shows that the tenders were

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W.A.Nos.2340 & 2363 of 2017

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to be submitted on or before 17.6.2017, and were to be opened at

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2 p.m. on 20.6.2017.

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In response to the tender notice published, apart from the appellants, respondents 3 and 4 also had submitted their bids. It is also relevant to state that the tender conditions required the tenderers to submit the prescribed EMD and the fee, the non compliance of which would result in rejection of the tenders itself. In Ext.R3(3), the bid submission confirmation, insofar as M/S Gautham Cement Works, one of the tenderers is concerned, the status as far as the tender fee and the EMD are concerned, is shown as 'paid' with the rider “subject to bank clearance”. According to the parties, similar is the case with respect of M/S Jyothi Construction Company, although Ext.R4(a) indicates that their bankers had confirmed of having made the

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payment in terms of the tender conditions as on 15.6.2017. Ext.P1 is the tender summary report dated 20^th of June 2017. In

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W.A.Nos.2340 & 2363 of 2017

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this document, it is stated that the tenders submitted by both Gautham Cement Works and Jyothi Construction Company were rejected for non-payment of fee.

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From paragraph 6 of the counter affidavit filed by the

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KSEB, we find that it is stated thus:

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“6. On 20.6.2017 at 7.05 p.m. the local head office of State Bank Of India at Thiruvananthapuram sent an e-mail to Kerala State Information Technology Mission who is the agency authorized to control the e- procurement system stating that certain RTGS transactions credited into their pooling account, the success of which was not updated to e-procurement system due to some technical issue at their end. It was further informed that they would update the status of those transactions at the earliest and requested to make arrangements to include the transactions for bid valuation process upon receipt of the confirmation. A true copy of the e-mail dated 20.6.2017 at 7.05 p.m. sent from SBI Local Head Office, Trivandrum to Kerala State IT Mission is produced herewith and marked as Ext.R1(b). Thereafter by e-mail dated 21.6.2017 at 6.23 p.m. SBI informed the Kerala State IT Mission that RTGS transactions mentioned in the trial mail had been included in the EOD xml dated 20.6.2017. Thereafter an e-mail was received by KSEB from Kerala State IT

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W.A.Nos.2340 & 2363 of 2017

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Mission at 22.6.2017 at 11.05 am along with the messages received from SBI was also forwarded and instructed the KSEB to revoke the tender 2017-KSEB126962-land proceed by accepting the bids. A true copy of the mail sent by Kerala State IT Mission to KSEB dated 22.6.2017 is produced herewith and marked as Ext.R1(c). Thereafter vide letter dated 24.6.2017 the 2^nd respondent requested for a confirmation from Kerala State IT Mission as to whether the tender should be revoked. Also mails dated 27.6.2017 and 1.7.2017 were received from the Kerala State IT Mission requesting to revoke the tender. Thereafter on 3.7.2017 a confirmation e-mail was received from e-procurement helpdesk, Kerala State IT Mission to revoke the tender. It is stated in the said em-mail that the same was being sent as per discussion with Nodal Officer, KSEB. A true copy of the e-mail sent by e-procurement helpdesk to KSEB dated 3.7.2017 is produced herewith and marked as Ext.R1(d). On the basis of the above a corrigendum was published in the e-tender web site on 6.7.2017. A true copy of the corrigendum No.1 published by KSEB dated 6.7.2017 is produced herewith and marked as Ext.R1(e). Thereafter on 7.7.2017 the tenders of respondents 3 and 4 were revoked to technical opening stage and a bid opening summary was published. A true copy of the bid opening summary published on 7.7.2017 at 12.06 p.m. is produced herewith and marked as Ext.R1(f). Hence all the prequalification bids of 6 bidders were evaluated for pre-qualification and except one bidder namely M/S

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W.A.Nos.2340 & 2363 of 2017

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Sharpline Builders and Developers Private Limited, Kannur were pre-qualified. On the basis of the minutes of the pre-qualification Committee the opening of price bids were published in the e-tender webside on 27.10.2017. All the pre-qualified tenderers were informed by letter dated 27.10.2017 that they have been pre-qualified and that the price bid would be openedat 2 pm. on 28.10.2017. Ext.P5 is copy of the letter issued to the petitioner. Similar letters were issued to other tenders also. The price bids were opened on 28.10.2017. The rates obtained are as follows:

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Electrical Circle	M/S G Cement	autam Works	Name of M/S A Struc	the firms nchor turals	Difference M/S A Struc	in rates of nchor turals
	8m(Rs)	9m(Rs)	8m(Rs)	9m(Rs)	8m(Rs)	9m(Rs)
Shornur	2050	3050	2670	3880	620	830
Tirur	2155	3250	2685	4055	530	805
Vadakara	2350	3650	2810	4230	460	580
Palakkad	2050	3000	2580	3865	530	865
Nilambur	2315	3550	2740	4170	425	620
Manjeri	2315	3550	2680	4050	365	500
Kozhikode	2315	3550	2685	4130	370	580

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From the above, it can be seen that the rates quoted by the petitioner herein is far above the rate offered

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W.A.Nos.2340 & 2363 of 2017

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by the lowest tenderer by Rs.365/- to Rs.620/- per 8M pole and by Rs.500 to Rs.865/- per 9M pole.”

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Accordingly the aforesaid two tenders were prequalified

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and it was this action of the Board, which led to the filing of the

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writ petitions.

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In the judgment under appeal, the learned Single Judge referred to the contentions urged on behalf of the appellants that acceptance of the pre-qualification of the aforesaid two tenderers, who are respondents 3 and 4 in W.A.2340/17, was against the tender conditions. Learned Single Judge held that since the alleged non compliance on their part in not remitting the fee on or before the prescribed date was on account of the fault of the technical system of the State Bank of India, the tenderers cannot be made victims of that mistake. It is on that

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basis, the writ petitions were dismissed. It is this judgment, which is under challenge before us.

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W.A.Nos.2340 & 2363 of 2017

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We heard the Senior Counsel appearing for the appellant

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in W.A.2340/17 and the learned counsel appearing for the appellant in W.A.2360/17. We also heard the respective counsel appearing for the rival tenderers and also the learned counsel appearing for the Kerala State Electricity Board.

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In sum and substance, the contention raised by the appellants is that the pre-qualification of the respondent tenderers is in violation of the tender conditions. In support of this plea, the counsel appearing for the appellants also relied on the judgment of the Apex Court in Bakshi Security and Personnel Services (P) Limited v. Devkishan Computed (P) Limited [2016 (8) SCC 446] . We have considered the submissions.

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It is true that in terms of the tender conditions, as

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indicated in Exts.P2 and P3, the tenderers were required to submit EMD and fee at rates prescribed therein. Such remittance

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W.A.Nos.2340 & 2363 of 2017

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should have been made on or before 17.6.2017, the date prescribed for submission of the tenders. It is true that as on that date the fee was not received by the agency authorised by the awarder and it was on that reason when the pre-qualification bids were opened on 20.6.2017, the tenders were rejected. This is evident from Ext.P1. However, as is disclosed from paragraph 6 of the counter affidavit filed by the Kerala State Electricity Board, the non remittance of the fee remitted by the tenderers with the bank was not on account of the fault of the tenderers, but it was on account of the system failure at the State Bank of India. This is clear from the correspondence between the Board and the Bank. In the aforesaid circumstances, the non compliance was beyond reasons which can be attributed to the tenderers and it was, therefore, unfair to make the tenderers victims for the system failure of the bank. It was taking note of this fact, the learned Single Judge upheld the actions of the KSEB.

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W.A.Nos.2340 & 2363 of 2017

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Moreover even the appellants do not have a case that the decision of the Board is vitiated for any malafides on their part. It

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is also important to note that the rates quoted by the respondent tenderers are far less than the rates quoted by the appellants. In such circumstances, as indicated by the Apex Court in Air India

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Limited v. Cochin International Airport Limited [AIR 2000 SC

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801], interference with the tender process would also be against public interest. Therefore, we uphold the judgment and dismiss these appeals.

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sd/- ANTONY DOMINIC, ACTING CHIEF JUSTICE

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sd/- DAMA SESHADRI NAIDU, JUDGE

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jes

M/S.Anchor Structurals v. the Kerrala State Electricity Board Limited

Case brief

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M/S.Anchor Structurals v. the Kerrala State Electricity Board Limited

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