Dismissed

Shankar Conductors (P) Ltd., v. State of Kerala

Kerala HC21 Jun 2019WP(C)/2571/2019

Case brief

AI extract

What is this about?

The High Court dismissed the writ petition filed by conductor manufacturers challenging the Kerala State Electricity Board's tender process. The court held that since the petitioners' bids were invalidated due to lack of valid tender submission and failure to rectify deviations, no relief was due.

What did the court decide?

The writ petition is dismissed, and the petitioners are not entitled to any relief sought.

Shankar Conductors (P) Ltd., Vs State of… — Contract and Commercial Disputes | Kerala HC (2019)

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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 SHAJI P.CHALY

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FRIDAY, THE 21ST DAY OF JUNE 2019 / 31ST JYAISHTA, 1941

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WP(C).No.2571 of 2019

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PETITIONER/S:

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1 SHANKAR CONDUCTORS (P) LTD., UMAYANELLOR ,KOLLAM REPRESENED BY ITS AUTHORIZED SIGNATORY AND MANAGER DINESH KUMAR SINGH

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2 KOLLAM INDUSTRIES, UMAYANELLOR, KOLLAM , REPRESENTED BY ITS AUTHORIZED SIGNATORY AND MANAGER ANUJ SINGH

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BY ADVS.

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SRI.K.P.DANDAPANI (SR.) SRI.MILLU DANDAPANI

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RESPONDENT/S:

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1 STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY,STORES PURCHASE DEPARTMENT, GOVT. SECRETARIAT, THIRUVANANTHPAURAM-695 001

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2 KERALA STATE ELECTRICITY BOARD LTD., VYDHUTHIBHAVAN,PATTOM P.O., THIRUVANANTHAPURAM-695 004 REPRESENTED BY THE CHAIRAM

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3 CHIEF ENGINEER (SCM), KERALA STATE ELECTRICITY BOARD LTD., VYDHUTHIBHAVAN, PATTOM P.O., THIRUVANANTHAPURAM-695 004

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4 THE SECRETARY TO GOVERNMENT POWER DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANNATHPAURAM-695 001

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R1 & R4 BY SMT .RASHMI. GP, SC. R2 & R3 BY SRI. SUDHEER GANESHKUMAR, SC

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21.06.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No.2571 of 2019 2

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JUDGMENT

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This writ petition is filed by the petitioner seeking the following reliefs:-

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“(i) issue a writ of certiorari or any other appropriate writ, order or direction calling for the records leading to Ext.P11 and Ext.P12 notice inviting tender and quash the same.

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(ii) issue a writ in the naute of a declaration declaring that Ext.P11 and Ext.P12 e-procurement-notice inviting tender is violativ of the Micro Small and Medium Enterprises Act, 2006; MSES order, 2012 as well as the Store Purchase Manual and therefore illegal and liable to be set aside.

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(iii) issue a writ in the nature of a declaration declaring that respondents 1 to 3 could not violate the policy adopted by Government of Inia for the development of Micro Small and Medium Enterprises as per Act 27 of 2006 and MSES order, 2012.

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(iv) issue a writ in the nature of a declaration declaring that as per the Store Purchase Manual (Note 1 attached to erstwhile para 9.21, Note 2 of Appendix 19) respondents can procure ACSR conductors only from the Micro Small and Medium Enterprises inside the State and not elsewhere.

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WP(C).No.2571 of 2019 3

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(v) Issue a writ of mandamus or any other appropriate writ, order or direction directing respondents 1 to 3 to issue fresh tender calling for e-procurement only from Micro, Small and Medium Enterprises within the state of Kerala in accordance to the Ext.P1 judgment.

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(vi) pas such other orders as this Hon'ble court deem fit and proper in the facts and circumstances of the case

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and

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(vii) award costs.”

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Brief material facts for the disposal of the

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writ petition are as follows:

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Petitioners are manufacturers of ACSR

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conductors, which is a type of high capacity, high strength stranded conductor, typically used in over head power lines. They are aggrieved by Exts.P11 and P12 e-procurement Notice Inviting Tenders issued

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by the 2^nd respondent for supply of Aluminium - Conductor Steel - Reinforced cable, since bids are invited from open market, which is in gross violation of the provisions of Micro Small and Medium Enterprises Act, 2006; MSME order, 2012 and the Store Purchase Manual. Therefore, according to

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the petitioners, Exts.P11 and P12 are illegal and

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WP(C).No.2571 of 2019 4

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arbitrary, liable to be interfered with by this court under Article 226 of the Constitution of India.

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The 2^nd and 3^rd respondents, i.e., the Kerala State Electricity Board and the Chief Engineer respectively have filed a counter affidavit, refuting the allegations and claims and demands raised by the petitioners. Among other contentions it is stated that, as per Ext.P11 tender dated 03.08.2018, the respondents have invited tender for 1000 kms of ACSR Wolf conductors with a probable amount of contract of Rs.11,40,00,000/-, and five companies i.e.,Lubinos Industries Ltd., Kolkata, Guptha Power Infrastructure Ltd., Odisha, Traco Cable Company Ltd., Kochi, M/s. M.K.Cables, Ooraman

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and Shankar Conductors Pvt. Ltd., Kollam participated in the tender. The tender was a two bid system, comprising of technical and commercial bids.

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In the bid conducted on 08.12.2018, the

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prequalification committee found that, the 1^st

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petitioner does not satisfy the prequalification conditions relating to inspection of factories insisted for new entrants. Petitioner is having a

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WP(C).No.2571 of 2019 5

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small industrial unit at Kollam district with

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facility to manufacture ACSR conductors Raccoon, Rabbit and Weasel, which are used for distribution lines with voltage level up to 11 KV. It does not

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have sufficient infrastructure facility for production, testing and handling of transmission line materials used for voltage level from 33 KV to 400 KV of KSEB Ltd. network which is the tendered item as per Ext.P11 tender notice.

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It is also stated that the materials used for

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transmission lines should be manufactured and tested

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during processing and at the completion of processing, at the site itself. On an inspection conducted at the premises of the 1^st petitioner it

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was revealed that, no such facility is available to

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the petitioner and that was the reason why the 1^st petitioner was disqualified. Moreover, 1^st

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petitioner had offered only a meagre quantity of 20 kms, whereas the requirement is 1000 kms. In that view of the matter, the tender was finalized on 16.01.2019 and the letter of award was issued on the

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very same day in favour of the following participants.

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WP(C).No.2571 of 2019 6

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Name	Qua	ntity	Unit Rate (all inclusive)
Gupta Power (L1)	700	kms	Rs.1,23,487.00
Infrastructure Ltd
Lumino Industries	150	kms	-Do-
Ltd (L2)
Traco Cable Company	150	kms	-Do-
Ltd. (Public Sector Unit)

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Subsequently, a detailed purchase order was placed on 28.01.2019 to the above firms.

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That apart, it is submitted that the 2^nd petitioner did not participate in the tender pursuant to Ext.11 tender notice and therefore, the 2^nd respondent cannot have any grievance against the tender at all. It was only after the tender was finalized and the letter of award was send, petitioner has approached this court with this Writ Petition. It is also pointed out that, in spite of the disqualification found against the petitioner,

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petitioner has not cared to challenge the said disqualification and therefore, the petitioner on account of Ext.P11 tender cannot have any legally sustainable grievance.

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WP(C).No.2571 of 2019 7

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So far as Ext.P12 tender notice dated

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11.12.2018 is concerned, it is stated that, tenders are invited for supply of GI Earth Wire 7.35 mm (150 kms) and 7.366 mm (40 kms). The said tender was a single bid system. Four firms namely M./s Malu wires, Bangalore–9, Nirmala Wires Pvt. Ltd, Kolkatta–39, Krithika Wires Ltd, Kolkatta and the 1^st petitioner herein participated in the said tender. In regard to the 1^st petitioner, certain documents were found missing and also deviation from the tender specifications were noted. Accordingly, as per Ext.R2(a) communication dated 28.01.2019, the 3^rd respondent addressed the petitioner requesting him to furnish missing documents and to withdraw the deviations found in the offer. As per Ext.R2(a), the 1^st petitioner had to comply with the request on or before 31.01.2019. But the 1^st petitioner failed to respond to the same within the stipulated time, which compelled the respondents to proceed with the tender submitted by other tenderors. However, the said tender is not yet finalized. Therefore, according to the respondents, petitioner has no real grievance to secure any relief from this court and the 2^nd petitioner had never submitted any tender in

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WP(C).No.2571 of 2019 8

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respect of Ext.P12 also.

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So much so, it is submitted that, as per Ext.P12, KSEB Ltd. invited tender for procurement of galvanized iron earth wire of specified dimensions. Galvanised wire and Un-galvanised wire are two different items as understood in common parlance as also in commercial parlance. Therefore, stranded

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wire including stay wire and earth wire mentioned in Annexure 19 as item No.367 is different from the item notified by the KSEB in Ext.P12. Moreover, it is the specific case of the Board that, consequent to the amendment of the Store Purchase Manual, Annexure 19 became obsolete and hence, MSME’s cannot claim any exclusive right to procure those items from such units. So also, MSME including the 1^st petitioner had approached this court claiming benefit of Annexure 19 on the ground that, even

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after the amendment of Store Purchase Manual, Annexure 19 is part of the Store Purchase Manual.

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However, the Board’s contention in this

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regard was repelled by learned Single Judge, evident from Ext.P1 judgment, holding that, Annexure 19 is

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still part of the Store Purchase Manual. However it is stated that, the Store Purchase Manual is not

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WP(C).No.2571 of 2019 9

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statutory and hence, no writ can be issued to enforce a non-statutory document except when there is allegation and proof of malafides coming within the ambit of Article 14 of the Constitution of India. However, the decision of the learned Single Judge was challenged in writ appeal and as per Ext.P10 judgment, the writ appeal was closed on the basis of certain subsequent developments, and during the pendency of the writ appeal, a meeting was convened by the Minister for Finance, in which, all the stake holders had participated and a decision was taken to divide the procurement of ACSR conductors in ratio 55.45 from Traco Cables and Kerala based MSME’s with a price escalation of L1 + 10% by giving a onetime exemption to the Store Purchase Manual. It is also pointed out that, the 1^st petitioner herein and others had agreed to the proposal and that is how the writ appeal was closed, and therefore, the contention of the KSEB Ltd with respect to Annexure 19 of Store Purchase Manual is remaining open. However it is pointed out that, in this case, the said question does not arise, since there was no validly constituted tender from the 1^st petitioner, enabling this court to consider all

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WP(C).No.2571 of 2019 10

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these questions.

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I have heard learned counsel for the petitioner, learned Government Pleader and learned Senior Counsel appearing for the respondents 2 and 3 and perused the pleadings and the documents on record.

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The issue with respect to Ext.P11 tender is to be considered by this court, taking into account, the bids submitted by the petitioner. It is an admitted fact that the bid submitted by the petitioner was disqualified, which is not under challenge in this writ petition. Therefore, the bid submitted by other tenderors was taken into account and the bid was finalized and accordingly, the agreements were executed by and between the successful tenderors and the Board. It is also curious to note that, this writ petition was filed after the finalization of the tender, however, none of the affected persons are made parties to this writ petition.

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So far as Ext.P12 tender is concerned, the case put forth by the petitioner is that, it is in clear violation of Annexure 19 of the Store Purchase Manual, the bids are invited. However, the Board

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has a case that, amendment was made to the Store Purchase Manual as per Ext.P7 by which, item No.1 of Annexure 19 namely, AC conductors up to and including 19 strands of Store Purchase Manual is changed to AC conductors up to and including 61 fans, and so also as per Ext.P8, direction by the government is with respect to items specified therein alone and that will not in any manner prevent the respondents from other items not included in Annexure 19 of the manual.

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Learned counsel for the petitioner has a contention that, in spite of issuance of Ext.P7, Annexure 19 of the Store Purchase Manual remains intact and there are no segregations made in respect of galvanized and un-galvanized products and the stand adopted by the KSEB Ltd against the entries contained under Annexure 19 Store Purchase Manual, cannot be sustained. Let that be so.

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On the other hand, learned Senior Counsel for the Board submitted that, in Ext.P12 tender, petitioner has sought certain deviations and it was thereupon that Ext.R2(a) letter was issued, directing the petitioner to withdraw the deviations found in the offer. However, petitioner has not

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WP(C).No.2571 of 2019 12

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issued any reply to Ext.R2(a) communication and therefore, the petitioner was not qualified enough for consideration of the bid. It is also stated that the bid pertaining to Ext.P12 is not yet finalized.

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In respect of Ext.R2(a), learned counsel for

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the petitioner submitted that, there is no proof or evidence before this court to show that any deviation was sought for by the petitioner while

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submitting the bid. However, it is clear from Ext.R2(a) that, the requirement sought for in Ext.R2(a) was to withdraw the deviations furnished

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in the tender, duly attested by the competent authority on or before 31.01.2019. Therefore, the contentions advanced by the petitioner that there was no such deviation made, cannot be sustained under law, especially due to the fact that petitioner has admitted receipt of Ext.R2(a) in the affidavit submitted along with IA 2/2019. In sum and substance, there was no valid tender submitted by the petitioner. Therefore, the other questions raised does not deserve consideration.

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In view of the aforesaid circumstances, I am

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of the view that, the issue relating to galvanized

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WP(C).No.2571 of 2019 13

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and un-galvanized wire, amendment to Annexure 19 of

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Store Purchase Manual can be left open. Accordingly, I do so.

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Analysing so, petitioners are not entitled to

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get any relief as is sought for in the writ petition, since there is no arbitrariness or illegality on the part of the 2^nd and 3^rd respondents in finalizing Ext.P11 tender, and proceeding with Ext.P12 tender in accordance with law.

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The writ petition fails and accordingly, it is dismissed.

Sd/-

SHAJI P.CHALY

JUDGE

24.06.2019

WP(C).No.2571 of 2019 14

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WP(C) 22132/2018 DATED 9.10.2018 EXHIBIT P2 TRUE COPY OF G.O(P) N.06/2014/SPD DATED 17.5.2014 EXHIBIT P3 TRUE COPY OF G.O(P) N.10/2014/SPD DATED 24.12.2014 EXHIBIT P4 TRUE COPY OF RELEVANT PAGE NOS 218,225 & 226 OF TH STORES PURCHASE MANUAL WHICH WAS AVAILABLE IN THE WEBSITE OF STORES PURCHASE DEPARTMENT EXHIBIT P5 TRUE COPY OF THE RELEVANT EXTRACT OF ANNEXURE 19 IN THE PRE-REVISED STORE PURCHASE MANUAL PAGE NO.S230 AND 239 EXHIBIT P6 TRUE COPY OF THE E-PROCUREMENT NOTICE INVITING TENDER FOR BID NO.KSEB/SCM/EP/2017-18 DTD.28.06.2017 EXHIBIT P7 TRUE COPY OF THE G.O(P) NO.09/2015/SPD DATED 03.08.2015 ISSUED BY THE 1ST RESPONDENT EXHIBIT P8 TRUE COPY OF THE COMMUNICATION BY THE 1ST RESPONDENT VIDE REF.NO.1411/A2/2014/SPD DATED 07.07.2015 EXHIBIT P9 TRUE COPY OF THE ORDER OF THE 1ST RESPONDENT BEARING REF NO.G.O(P) NO.10/2016/SPD DATED 20.07.2016 EXHIBIT P10 TRUE COPY OF THE JUDGMENT DATED 20.12.2018 IN W.A.NO.2104 OF 2018 EXHIBIT P11 TRUE COPY OF E-PROCUREMENT NOTICE INVITING TENDER FOR BID NOS.KSEB/SCM/EP/50/2018-19 DTD 3.08.2018 EXHIBIT P12 TRUE COPY OF E-PROCUREMENT NOTICE INVITING TENDER FOR BID NOS.KSEB/SCM/EP/61/2018-19 DTD 11.12.2018 EXHIBIT P13 TRUE COPY OF THE GOVT. ORDER BEARING

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WP(C).No.2571 of 2019 15

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NO.G.O.(P) NO.06/2014/SPD DTD.

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17.5.2014

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RESPONDENT'S EXHIBITS:-

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EXHIBIT R2(a) TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT TO THE 1ST PETITIONER

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DATED 28.01.2019

Shankar Conductors (P) Ltd., v. State of Kerala

Case brief

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Shankar Conductors (P) Ltd., v. State of Kerala

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