Dismissed

P.M.Hassankutty v. the State of Kerala

Kerala HC2 Feb 2021WP(C)/6241/2020

Case brief

AI extract

What is this about?

Writ petitions by dealers in used paper challenging Clause 11 of an e-tender notification for sale of waste paper, which barred bids below the market rate and rejected bids more than 30% above it. The court upheld the condition as a response to defaulting bidders, found no violation of Sections 3 and 4 of the Competition Act, 2002, and dismissed the petitions.

What the court decided

AI extract

P.M.Hassankutty Vs the State of Kerala — Public Procurement and Tenders | Kerala HC (2021)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶4

TUESDAY, THE 02ND DAY OF FEBRUARY 2021/13TH MAGHA,1942 WP(C).No.6241 OF 2020(E)

¶5

PETITIONER:

¶6

P.M.HASSANKUTTY, AGED 65 YEARS, S/O. MEERAN RAWTER, PARAPPALLIL HOUSE, VALAVUKAYAM, ANAKKAL P.O., KANJIRAPPALLY-686 508.

¶7

BY ADVS. SRI.ALEX.M.SCARIA SMT.SARITHA THOMAS

¶8

RESPONDENTS:

¶9

1 THE STATE OF KERALA, REPRESENTED BY PRINCIPAL SECRETARY TO GOVERNMENT, STATIONERY DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001.

¶10

ADDL. 2 ASHA WASTE PAPER COMPANY, 48/2386, THANIKKAL JUNCTION, ELAMAKKARA P.O., KOCHI - 682026, REPRESENTED BY ITS PROPRIETOR, SRI.K.RENJAN SHENOY.

¶11

IS IMPLEADED AS PER ORDER DATED 21.01.2021 IN IA No.1/2021 IN WP(C) 6241/2020.

¶12

R1 BY GOVERNMENT PLEADER SMT. K.M.RASHMI R2 BY ADV. P.SANTHOSH KUMAR (PANAMPALLI NAGAR) R2 BY ADV. SRI.K.P.CHANDRASEKHAR R2 BY ADV. SRI.V.ANANDA SHENOY

¶13

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.02.2021, ALONG WITH WP(C).6643/2020(E), WP(C).6940/ 2020(N), WP(C).7173/2020(V), WP(C).7526/2020(M), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) No.6241,6643,6940,7173&7526/2020

¶15

: 2 :

¶16

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶17

PRESENT

¶18

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶19

TUESDAY, THE 02ND DAY OF FEBRUARY 2021/13TH MAGHA,1942

¶20

WP(C).No.6643 OF 2020(E)

¶21

PETITIONER:

¶22

RINROSE TRADERS, ELAMAKARA P.O., KALOOR, COCHIN-682 017, REPRESENTED BY ITS MANAGING PARTNER.

¶23

BY ADVS. SRI.LINDONS C.DAVIS SMT.E.U.DHANYA

¶24

RESPONDENTS:

¶25

1 STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, PRINTING AND STATIONERY DEPARTMENT, THIRUVANANTHAPURAM-695001.

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2 CONTROLLER OF STATIONERY, OFFICE OF THE CONTROLLER OF STATIONERY, STATIONERY DEPARTMENT, PMG, THIRUVANANTHAPURAM-695033.

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3 ISMAIL P.B., S/O.M.A.BAVA, PADINJAKKARA HOUSE, VATTEKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DISTRICT-682021.

¶28

WP(C) No.6241,6643,6940,7173&7526/2020

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: 3 :

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4 SALIM T.A., S/O.T.A.ALIYAR, THALAKOTTIL HOUSE, VATTEKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DISTRICT-682021.

¶31

5 M.M.ALI, S/O.MOIDEEN, MATTAPILLY HOUSE, ARAKKAKADAVU, VENNALA, KAKKANAD VILLAGE, ERNAKULAM DISTRICT-682028.

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6 D.GOPINATH, KUNNUMEL THEKKETHIL HOUSE, ERUVA P.O., KAYAMKULAM, ALAPPUZHA DISTRICT-690572.

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7 ANOOP C.K., S/O.ABDUL KHADER, CHERUPULLIPARAMBIL HOUSE, VENNALA P.O., CHALIKKAVATTOM-682028.

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8 KOZHIKODE DISTRICT SCHEDULED CASTE LABOUR CONTRACT CO-OPERATIVE SOCIETY LTD., REPRESENTED BY ITS SECRETARY, NEAR OLD BUS STAND, THAMARASSERY P.O.-673573.

¶35

R1-2 BY GOVERNMENT PLEADER SMT. K.M.RASHMI R3-5, R7 BY ADV. SRI.R.SANJITH R3-5, R7 BY ADV. SMT.C.S.SINDHU KRISHNAN

¶36

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.02.2021, ALONG WITH WP(C).6241/2020(E), WP(C).6940/ 2020(N), WP(C).7173/2020(V), WP(C).7526/2020(M), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶37

WP(C) No.6241,6643,6940,7173&7526/2020

¶38

: 4 :

¶39

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶40

PRESENT

¶41

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶42

TUESDAY, THE 02ND DAY OF FEBRUARY 2021/13TH MAGHA,1942

¶43

WP(C).No.6940 OF 2020(N)

¶44

PETITIONER:

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VISHNU SOMAN, AGED 28 YEARS, S/O D. SOMAN, MANAGING PARTNER, VINAYAKA TRADERS, ERUVA P.O., KAYAMKULAM.

¶46

BY ADV. SRI.K.R.SUNIL

¶47

RESPONDENTS:

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1 THE STATE OF KERALA, REP BY THE PRINCIPAL SECRETARY, PRINTING AND STATIONARY DEPARTMENT, THIRUVANANTHAPURAM-695 001.

¶49

2 THE CONTROLLER OF STATIONARY, OFFICE OF THE STATIONERY CONTROLLER, THIRUVANANTHAPURAM-695 033.

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3 THE DEPUTY CONTROLLER OF STATIONERY, OFFICE OF THE STATIONERY CONTROLLER, THIRUVANANTHAPURAM-695 033.

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4 SHYNI MARTIN, RING ROSE TRADERS, KURISHINGAL HOUSE, ELAMAKKARA P.O., ERNAKULAM.

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5 T.A SALIM, S/O T.A ALIYAR, THALAKKOTTIL HOUSE, VATTEKKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DISTRICT.

¶53

WP(C) No.6241,6643,6940,7173&7526/2020

¶54

: 5 :

¶55

6 M.M. ALI, S/O MOIDEEN, MATTAPPALLIL HOUSE, ARAKKAKADAVU, VENNALA, KAKKANAD VILLAGE, ERNAKULAM

¶56

7 ISMAIL P.B., S/O M.A.BAVA, PADINJAKKARA HOUSE, VATTEKKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DISTRICT.

¶57

8 C.K.ANOOB, S/O ABDUL KHADER, CHERUPULLIPARAMBIL HOUSE, VENNALA P.O., CHALIKKAVATTOM, ERNAKULAM DISTRICT.

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9 THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU PMG, VIKAS BHAVAN, THIRUVANANTHAPURAM

¶59

R1-3,R9 BY GOVERNMENT PLEADER SMT K.M.RASHMI

¶60

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.02.2021, ALONG WITH WP(C).6241/2020(E), WP(C).6643/ 2020(E), WP(C).7173/2020(V), WP(C).7526/2020(M), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶61

WP(C) No.6241,6643,6940,7173&7526/2020

¶62

: 6 :

¶63

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶64

PRESENT

¶65

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶66

TUESDAY, THE 02ND DAY OF FEBRUARY 2021/13TH MAGHA,1942

¶67

WP(C).No.7173 OF 2020(V)

¶68

PETITIONER:

¶69

VIGNESH SOMAN, AGED 26 YEARS, S/O. D.SOMAN, PROPRIETOR, KARTHIKEYA TRADERS, ERUVA P.O., KAYAMKULAM

¶70

BY ADV. SRI.K.R.SUNIL

¶71

RESPONDENTS:

¶72

1 THE STATE OF KERALA, REP BY THE PRINCIPAL SECRETARY, PRINTING AND STATIONARY DEPARTMENT, PMG P.O., THIRUVANANTHAPURAM-695 033

¶73

2 THE CONTROLLER OF STATIONARY, OFFICE OF THE STATIONERY CONTROLLER, PMG P.O., THIRUVANANTHAPURAM-695 033

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3 THE DEPUTY CONTROLLER OF STATIONERY, OFFICE OF THE STATIONERY CONTROLLER, PMG P.O., THIRUVANANTHAPURAM-695 033

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4 SHYNI MARTIN, RING ROSE TRADERS, KURISHINGAL HOUSE, ELAMAKKARA P.O., ERNAKULAM-682 026

¶76

5 T.A.SALIM, S/O. T.A.ALIYAR, THALAKKOTTIL HOUSE, VATTEKKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE P.O, ERNAKULAM DISTRICT-682 030

¶77

WP(C) No.6241,6643,6940,7173&7526/2020

¶78

: 7 :

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6 M.M.ALI, S/O. MOIDEEN, MATTAPPALLIL HOUSE, ARAKKAKADAVU, VENNALA P.O., KAKKANAD VILLAGE, ERNAKULAM-682 028

¶80

7 ISMAIL P.B., S/O. M.A BAVA, PADINJAKKARA HOUSE, VATTEKKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DISTRICT-682 030

¶81

8 C.K.ANOOB, S/O. ABDUL KHADER, CHERUPULLIPARAMBIL HOUSE, VENNALA P.O., CHALIKKAVATTOM, ERNAKULAM DISTRICT-682 028

¶82

9 THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU P.M.G, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 033

¶83

R1-3,R9 BY GOVERNMENT PLEADER SMT K.M.RASHMI

¶84

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.02.2021, ALONG WITH WP(C).6241/2020(E), WP(C).6643/ 2020(E), WP(C).6940/2020(N), WP(C).7526/2020(M), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) No.6241,6643,6940,7173&7526/2020

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: 8 :

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶88

PRESENT

¶89

THE HONOURABLE MR.JUSTICE N.NAGARESH

¶90

TUESDAY, THE 02ND DAY OF FEBRUARY 2021/13TH MAGHA,1942

¶91

WP(C).No.7526 OF 2020(M)

¶92

PETITIONER:

¶93

D.GOPINATH, AGED 51 YEARS, S/O DAMODARA PANICKER, MANAGING PARTNER, SAKTHI TRADERS, ERUVA P.O., KAYAMKULAM

¶94

BY ADV. SRI.K.R.SUNIL

¶95

RESPONDENTS:

¶96

1 THE STATE OF KERALA, REP BY THE PRINCIPAL SECRETARY, PRINTING AND STATIONARY DEPARTMENT, PMG P.O., THIRUVANANTHAPURAM-695 033.

¶97

2 THE CONTROLLER OF STATIONARY, OFFICE OF THE STATIONERY CONTROLLER, PMG P.O., THIRUVANANTHAPURAM-695 033.

¶98

3 THE DEPUTY CONTROLLER OF STATIONERY, OFFICE OF THE STATIONERY CONTROLLER, PMG P.O., THIRUVANANTHAPURAM-695 033.

¶99

4 SHYNI MARTIN, RING ROSE TRADERS, KURISHINGAL HOUSE, ELAMAKKARA P.O., ERNAKULAM-682 026.

¶100

WP(C) No.6241,6643,6940,7173&7526/2020

¶101

: 9 :

¶102

5 T.A.SALIM, S/O T.A ALIYAR, THALAKKOTTIL HOUSE, VATTEKKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE P.O., ERNAKULAM DISTRICT-682 030.

¶103

6 M.M ALI, S/O MOIDEEN, MATTAPPALLIL HOUSE, ARAKKAKADAVU, VENNALA P.O., KAKKANAD VILLAGE, ERNAKULAM-682 028.

¶104

7 ISMAIL P.B, S/O M.A.BAVA, PADINJAKKARA HOUSE, VATTEKKUNNAM, NJALAKAM DESOM, THRIKKAKARA NORTH VILLAGE, ERNAKULAM DISTRICT-682 030.

¶105

8 C.K.ANOOB, S/O ABDUL KHADER, CHERUPULLIPARAMBIL HOUSE, VENNALA, P.O.CHALIKKAVATTOM, ERNAKULAM DISTRICT-682 028.

¶106

9 THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU PMG, VIKAS BHAVAN, THIRUVANANTHAPURAM-695 033.

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R1-3, R9 BY GOVERNMENT PLEADER SMT. K.M.RASHMI

¶108

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 02.02.2021, ALONG WITH WP(C).6241/2020(E), WP(C).6643/ 2020(E), WP(C).6940/2020(N), WP(C).7173/2020(V), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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[CR]

¶110

WP(C) No.6241,6643,6940,7173&7526/2020

: 10 :

N. NAGARESH, J.

W.P.(C) Nos.6241, 6643, 6940, 7173 and 7526 of 2020

¶115

Dated this the 2^nd day of February, 2021

¶116

J U D G M E N T

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~ ~ ~ ~ ~ ~ ~ ~ ~

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Petitioners in all these writ petitions are doing

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business in used papers. They buy old and used papers and sell it as raw materials for paper recycling industries. They have approached this Court aggrieved by conditions in the e-tender notification No.1308/D1/2019/Stationery dated 20.10.2019 issued by the Stationery Controller, Stationery Department, Government of Kerala.

¶120

Clause 11 of the said e-tender notification

¶121

No.1308/D1/2019/Stationery dated 20.10.2019 issued by the

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WP(C) No.6241,6643,6940,7173&7526/2020 : 11 :

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Stationery Controller (hereinafter referred to as ‘the Notification’ for short) provides that tenders quoting price below the Government approved market rate would not be approved. Those tenders quoting up to 30% above the current market rate will be treated as competitive bids and tenders exceeding the said limit will be treated as abnormal prices and would be rejected.

¶124

The contention of the petitioners is that there cannot be a ceiling limit to be fixed in a process of competitive bidding. Competitive bidding means persons who are offering more competitive rates will be selected as successful bidders. If ceiling limit is fixed, all persons participating in the tender would be quoting equal amount up to the ceiling limit. Such quotes cannot be treated as competitive bids.

¶125

The petitioners would further contend that the said Clause No.11 would cause or is likely to cause an appreciable adverse effect on competition. It is therefore void, offending the provisions contained in the Competition Act, 2002. Though the respondents would contend that Clause 11 is

¶126

WP(C) No.6241,6643,6940,7173&7526/2020 : 12 :

¶127

intended to avoid unhealthy competition, the condition in effect is to bid in accordance with the rates published for a different period. The Notification was published in October, 2019. At

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that time, the published rates were for the month from July, 2019 to September, 2019.

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Petitioners would further contend that the districtwise rates of papers made available by the respondents to this Court on 15.01.2021, were not available at the time of Ext.P1 Notification. There was no publication of market rate fixed by the Government. The petitioners therefore could not have quoted rates as stipulated in Clause 11 of the Notification.

¶130

Quoting the rates published for items, the ceiling limit and rate selected in the tender proceedings, the petitioners argued that the rates selected by the respondents for award of contracts, are not the rates within the ceiling limit of 30% added to the current market rate. The selected rates are 2 to 3 times higher than the notified rates. Furthermore, the selected rates are not the highest rates quoted. In short,

¶131

WP(C) No.6241,6643,6940,7173&7526/2020 : 13 :

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contractors who have been selected are not the contractors who have quoted within the ceiling limit. Nor are they the persons who have quoted the highest rates. The proceedings pursuant to the said Notification are therefore highly illegal, arbitrary and unsustainable, contended the petitioners.

¶133

The Controller of Stationery resisted the writ petitions filing counter affidavit. The Stationery Controller stated that tenders were awarded to those bidders who had quoted acceptable rates as per the tender Company condition in Clause 11 of the Notification. According to the Stationery Controller, the market rate for various waste paper items was published in the e-tender site of Government of Kerala and in the website of Stationery Department.

¶134

While publishing the Notification, these market rates were concluded based on the average rates for various waste paper items published by the Economic and Statistics Department of the Government of Kerala, for the period from July, 2019 to September, 2019. The Stationary Controller further stated that a tenderer can quote a rate not below the

¶135

WP(C) No.6241,6643,6940,7173&7526/2020 : 14 :

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market rate fixed for a particular kind of waste paper item. He can quote a maximum competitive rate up to 30% above the market rate. Quoted rate is not the exclusive factor in awarding a tender. History of performance of contractors is a decisive factor. The contract is not intended to be awarded solely on the basis of the highest quote.

¶137

Relying on the judgment of the Apex Court in Jagdish Mandal v. State of Orissa and others [(2007) 14 SCC 517] , Sri. K.R. Sunil, learned counsel appearing for the petitioners in WP(C) Nos.6940, 7173 and 7526 of 2020, argued that interference in tender or contractual matters in exercise of power of judicial review is permissible if the process adopted or decision made is malafide or intended to favour someone or the same is so arbitrary and irrational that no responsible authority acting under law could have arrived at it or it affected the public interest. Relying on the judgment

¶138

of the Apex Court in Chairman, All India Railway Recruitment Board and another v. K. Shyam Kumar and others [(2010) 6 SCC 614] , the learned counsel for the

¶139

WP(C) No.6241,6643,6940,7173&7526/2020 : 15 :

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petitioners urged that this Court is bound to interfere with the impugned tender proceedings since the proceedings are so reprehensible in its defiance of logic or of accepted standards that no sensible person who had applied his mind to the issue to be decided could have opted it.

¶141

The learned counsel for the petitioners further argued that by the impugned Notification, the bidders are required to do what they cannot possibly perform. Therefore, in view of the judgment of this Court in Sree Vigneshwara Packs (SV Packs) v. Travancore Devaswom Board and

¶142

another [2019 KHC 953] , the impugned Notification is liable to be set aside.

¶143

Sri. Alex M. Scaria, learned counsel appearing for the petitioner in W.P.(C) No.6241/2020, argued that Clause No.11 in the impugned Notification is highly unjust and illegal and if the tenders which quote amounts in excess of 30% of the the market value are not accepted as valid tenders, it can add only loss to the government exchequer. When there is a condition in a Notification which is against the interest of the

¶144

WP(C) No.6241,6643,6940,7173&7526/2020 : 16 :

¶145

State and is intended to cause loss to the State, this Court would be justified in setting aside the Notification and directing the State to issue a fresh Notification.

¶146

Sri. Lindons C. Davis, learned counsel for the petitioner in W.P.(C) No.6643/2020, contended that the contractors selected by the State are not the persons who have quoted within the ceiling limit or persons who have quoted the highest rate in spite of ceiling limits. The method of selection is not known to the public. Therefore, this Court has to direct the respondents to award the contracts to the highest bidders.

¶147

I have heard the learned counsel for the petitioners appearing in the writ petitions and the learned Government Pleader appearing for State-respondents. I have also heard the counsel appearing for the contesting respondents in the writ petitions.

¶148

From the affidavits filed by the Controller of Stationery, it is evident that in each financial year, contracts for the sale of waste papers are being fixed for a higher rate

¶149

WP(C) No.6241,6643,6940,7173&7526/2020 : 17 :

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than that of the previous year, due to competition among bidders. It is a common practice followed by the selected contractors not to lift waste papers from various Government offices. Many a time, bids are made on abnormal prices and subsequently the contractors refuse to lift waste paper. It was in these circumstances that it was decided to incorporate Clauses 11 and 13 to the tender conditions.

¶151

Rates of papers were calculated in each District based on the Economics and Statistics Department’s market rate table from July, 2019 to September, 2019. There is no illegality or arbitrariness on the part of a tendering authority in insisting that the quotes should not be below the market rate and should not exceed more than 30% of the current market rate. The contention of the petitioners is that current market rates were not published and what was published was the market rates of the preceding three months.

¶152

This Court is unable to accept the said argument of the petitioners for the reason that market rates are generally fixed taking into account the price of the commodity during the

¶153

WP(C) No.6241,6643,6940,7173&7526/2020 : 18 :

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immediately preceding period also. Clause 11 of the tender Notification states that market rates which are existing for the time being, will be the criteria. Therefore, if an authority competent to decide market rates of waste paper has notified the market rates for the preceding three months and that is the only official market rate which is available, the Controller of Stationery will be justified in taking the same as the market rate for the purpose of selection of bidders.

¶155

The further argument of the petitioners is that the market rates were not published in the tender Notification and therefore by insisting compliance of Clause 11, the petitioners are forced to do an impossible task of presuming the market rate for quoting bid amounts. The bidders are compelled to do what they cannot possibly perform, is the argument. This argument does not appear to be correct. The counter affidavit in the writ petitions would indicate that market rates for various waste paper items were published in the e-tender site of Government of Kerala and in the website of Stationery Department. While publishing the impugned Notification,

¶156

WP(C) No.6241,6643,6940,7173&7526/2020 : 19 :

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these market rates were decided on the basis of average rates for various waste paper items published by the Economics and Statistics Department, Government of Kerala for the period from July, 2019 to September, 2019. The market rates are in public domain, especially in the website of Stationery Department. The petitioners cannot legally insist that the Stationary Controller should disclose the existing market rates in the tender Notification itself.

¶158

The petitioners would contend that fixing of ceiling limits in a tender would make the same non-competitive. In a competitive tender proceedings, there cannot be a ceiling. It would be against the interest of the State also, contended the petitioners. In this regard, it is to be noted that the selection of contractors through the tender process is not based on the amount quoted alone. Various factors and qualifications of the contractors are taken into account. The previous transactions and history of the contractors are also made relevant criteria for award of contract. Therefore, it cannot be said that fixing a ceiling limit by itself would defeat the

¶159

WP(C) No.6241,6643,6940,7173&7526/2020 : 20 :

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competitiveness of the tender. Even if there are more than one tenderer who has quoted the same upper ceiling limit, the selection will be based on other criteria also. In short, the competitiveness of bidders is not decided on the basis of bid amounts alone.

¶161

Clause 11 has been included in the notification based on the past experience of the authorities. It was a common practice that bidders for waste papers quote abnormal and unrealistic prices and get the contract awarded in their favour. Subsequently, such contractors refuse to lift the waste papers perhaps due to the reason that they will not make much profit due to the abnormal rates quoted by themselves. The authorities were drawn to litigations by such defaulting contractors. Even when such contractors are blacklisted, the experience of the authorities is that the same contractors will again make bids in the name of some other entities and get the contract awarded in their favour. It is such past experience that has compelled the Controller of Stationery to include Clause 11 in the impugned tender

¶162

WP(C) No.6241,6643,6940,7173&7526/2020 : 21 :

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Notification. This Court does not find any illegality or irregularity in the conditions stipulated.

¶164

The arguments of the petitioners based on Sections 3 and 4 of the Competition Act, 2002 are also unacceptable. The argument is that the provisions in the e-tender Notification

¶165

dated 20.10.2019 are in violation of Sections 3 and 4 of the Act, 2002.

¶166

Section 3 of the Competition Act, 2002 provides

¶167

that no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. Sub-section (2) of Section 3 states that any agreement entered into in contravention of the provisions contained in sub-section (1) shall be void. As per sub-section (3) of Section 3, any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise

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WP(C) No.6241,6643,6940,7173&7526/2020 : 22 :

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or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade or goods or provision of services, which directly or indirectly determines purchase or sale prices shall be presumed to have an appreciable adverse effect on competition.

¶170

The question is whether the Stationery Controller, Stationery Department, who has floated the e-tender Notification, can be treated as “enterprise” and would come within the ambit of Section 3. Section 2(h) defines “enterprise” as follows:-

¶171

“enterprise” means a person or a department of the Government, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space. Explanation – For the purposes of this clause, -

¶172

WP(C) No.6241,6643,6940,7173&7526/2020 : 23 :

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(a) “activity” includes profession or occupation;

¶174

(b) “article” includes a new article and “service” includes a new service;

¶175

¶176

(i) a plant or factory established for the production, storage, supply, distribution, acquisition or control of any article or goods;

¶177

(ii) any branch or office established for the provision of any service.”

¶178

The activity of selling waste paper/used paper cannot be treated as an activity of the Government relatable to the sovereign functions of the Government. Therefore, the Stationery Controller representing the Government of Kerala would indeed fall within the definition of “enterprise”.

¶179

However, that by itself will not help the petitioners in any manner because to term any agreements as anticompetitive agreement and to make Section 3 applicable to the Stationery Controller, supply of used paper/waste paper should be of such a nature that it is likely to cause an appreciable adverse effect on competition within India. Selling through auction waste paper/used paper generated in

¶180

the Government offices in Kerala, cannot be said to be one causing an appreciable adverse effect on competition within

¶181

WP(C) No.6241,6643,6940,7173&7526/2020 : 24 :

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India. Any agreements entered into between the Stationery Controller and contractors for sale/purchase of waste paper/used paper cannot be described as one directly or indirectly determining purchase or sale price in identical or similar trade of goods

¶183

Section 4(1) of the Competition Act, 2002 prohibits abuse of dominant position and provides that no enterprise or group shall abuse its dominant position thereby directly or indirectly imposing unfair or discriminatory condition in purchase or sale of goods in services or price in purchase or sale (including predatory price) of goods or service. Clause (a) under Explanation to Section 4(2) defines “dominant position” as a position of strength, enjoyed by an enterprise in the relevant market in India, which enable it to operate independently of competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour.

¶184

The sale of waste paper/used paper by the Government of Kerala under no stretch of imagination, can be

¶185

WP(C) No.6241,6643,6940,7173&7526/2020 : 25 :

¶186

said to make the Government in a dominant position in the waste paper/used paper market in India. Therefore, the question of abuse of dominant position by the Stationery Controller or Government of Kerala does not arise. The contentions of the petitioners based on Sections 3 and 4 of the Competition Act, 2002 are therefore liable to be rejected.

¶187

For all the above reasons, this Court does not find any merit in these writ petitions and the writ petitions are hence dismissed.

¶188

Sd/- N. NAGARESH, JUDGE

¶189

aks/28.01.2021

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WP(C) No.6241,6643,6940,7173&7526/2020 :26:

¶191

APPENDIX OF WP(C) 6241/2020

¶192

PETITIONER'S EXHIBITS:

¶193

EXHIBIT	P1 TRUE COPY OF THE JUDGMENT DATED 14/06/2007 IN WPC NO. 11653/07.
EXHIBIT	P2 TRUE COPY OF THE CIRCULAR BEARING NO. 363/DI/2019/STATIONERY DATED 12/06/2019.
EXHIBIT	P3 TRUE COPY OF THE CIRCULAR BEARING NO. 415/DI/2019/DI/STATIONERY DATED 12/06/2019.
EXHIBIT	P4 TRUE COPY OF THE CIRCULAR BEARING NO. 413/DI/2019/STATIONARY DAD 06/07/2019.
EXHIBIT	P5 TRUE COPY OF THE CIRCULAR BEARING NO. 414/DI/2019/STATIONERY DATED 06/07/2019.
EXHIBIT	P6 TRUE COPY OF THE PRINT OUT OF THE BOQ (BILL OF QUANTITY) FROM THE OFFICIAL WEBSITE OF THE RESPONDENT.
EXHIBIT	P7 TRUE COPY OF THE NOTIFICATION NO. 1308/DI/2019/STATIONERY DATED 20/10/2019.
EXHIBIT	P8 A TRUE PRINT OUT OF THE DISTRICT WISE
	RATE OF WASTE PAPER FOR THE PERIOD
	FROM JULY 2019 TO SEPTEMBER, 2019
	RECOGNISED BY THE STATISTICS
	DEPARTMENT, AVAILED OF FROM ITS OFFICIAL WEBSITE.
EXHIBIT	P9 A TRUE COPY OF THE E-TENDER DETAILS DOWN LOADED FROM THE OFFICIAL WEB SITE.
RESPOND	ENTS' EXHIBITS:
EXHIBIT	R1(a) A TRUE COPY OF THE LETTER
	NO.E2629/2017/L.U.B DATED 01.02.2019

¶194

WP(C) No.6241,6643,6940,7173&7526/2020 :27:

¶195

APPENDIX OF WP(C) 6643/2020

¶196

PETITIONER'S EXHIBITS:

¶197

EXHIBIT P1 TRUE COPY OF THE E-TENDER NOTICE DATED 20.10.2019. EXHIBIT P2 A COPY OF THE BOQ SUMMERY DETAILS OF PURCHASE AND REMOVAL OF WASTE PAPER (KOLLAM). EXHIBIT P3 A COPY OF THE BOQ SUMMERY DETAILS OF PURCHASE AND REMOVAL OF WASTE PAPER (THRISSUR) EXHIBIT P4 A COPY OF THE BOQ SUMMERY DETAILS OF PURCHASE AND REMOVAL OF WASTER PAPER (PALAKKAD) EXHIBIT P5 A COPY OF THE BOQ SUMMERY DETAILS OF PURCHASE AND REMOVAL OF WASTE PAPER (MALAPPURAM) EXHIBIT P6 A COPY OF THE BOQ SUMMERY DETAILS OF PURCHASE AND REMOVAL OF WASTE PAPER (KOZHIKODE). EXHIBIT P7 A COPY OF THE DISTRICT WISE RATE OF WASTE PAPER FOR THE PERIOD FROM JULY 2019 TO SEPTEMBER 2019 IN 14 DISTRICTS. EXHIBIT P8 A COPY OF THE TENDER SUMMARY REPORT CANCELLING THE TENDER WITH RESPECT TO PURCHASE AND REMOVAL OF WASTE PAPER IN KOLLAM DISTRICT. EXHIBIT P9 A COPY OF THE RETENDER NOTIFICATION PUBLISHED BY THE 2ND RESPONDENT DATED 26.02.2020. EXHIBIT P10 A COPY OF THE RETENDER DETAILS PUBLISHED IN THE OFFICIAL WEBSITE FOR E-TENDERING.

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WP(C) No.6241,6643,6940,7173&7526/2020

¶199

:28:

¶200

APPENDIX OF WP(C) 6940/2020

¶201

PETITIONER'S EXHIBITS:

¶202

EXHIBIT P1 THE TRUE COPY OF THE E-TENDER NOTICE DATED 20.10.2019 PUBLISHED BY THE 2ND RESPONDENT

¶203

EXHIBIT P2 A LETTER ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER DATED 25.2.2020 EXHIBIT P3 THE TRUE COPY OF THE RE-TENDER NOTICE ISSUED BY THE 2ND RESPONDENT DATED 26.2.2020 EXHIBIT P4 THE TENDER APPROVAL LETTER DATED 25.11.2019 ISSUED BY THE KERALA STATE LOTTERY DEPARTMENT TO THE PETITIONER. EXHIBIT P5 THE TRUE COPY OF THE INVOICE TO ONE JAYA CUTTING WORK, SIVAKASHI, DATED 5/2/2020 BY THE CONTROLLER FINANCE AND ACCOUNT KERALA BOOKS AND PUBLICATIONS SOCIETY EXHIBIT P6 THE TRUE COPY OF THE INVOICE TO ONE JAYA CUTTING WORK, SIVAKASHI, DATED 12/2/2020 BY THE CONTROLLER FINANCE AND ACCOUNT KERALA BOOKS AND PUBLICATIONS SOCIETY

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WP(C) No.6241,6643,6940,7173&7526/2020

¶205

:29:

¶206

APPENDIX OF WP(C) 7173/2020

¶207

PETITIONER'S EXHIBITS:

¶208

EXHIBIT P1 THE TRUE COPY OF THE E-TENDER NOTICE DATED 20.10.2019 PUBLISHED BY THE 2ND RESPONDENT

¶209

EXHIBIT P2 A LETTER ISSUED BY THE 3RD RESPONDENT TO ONE OF A BIDDER PARTICIPATED IN THE ABOVE TENDER DATED 25.02.2020

¶210

EXHIBIT P3 THE TRUE COPY OF THE RE-TENDER NOTICE ISSUED BY THE 2ND RESPONDENT DATED 26.02.2020

¶211

EXHIBIT P4 THE TENDER APPROVAL LETTER DATED 25.11.2019 ISSUED BY THE KERALA STATE LOTTERY DEPARTMENT TO ONE VINAYAKA TRADERS

¶212

EXHIBIT P5 THE TRUE COPY OF THE INVOICE TO ONE JAYA CUTTING WORK, SIVAKASHI, DATED 5/2/2020 BY THE CONTROLLER FINANCE AND ACCOUNT KERALA BOOKS AND PUBLICATIONS SOCIETY

¶213

EXHIBIT P6 THE TRUE COPY OF THE INVOICE TO ONE JAYA CUTTING WORK, SIVAKASHI, DATED 12/2/2020 BY THE CONTROLLER FINANCE AND ACCOUNT KERALA BOOKS AND PUBLICATIONS SOCIETY

¶214

WP(C) No.6241,6643,6940,7173&7526/2020

¶215

:30:

¶216

APPENDIX OF WP(C) 7526/2020

¶217

PETITIONER'S EXHIBITS:

¶218

EXHIBIT P1 THE TRUE COPY OF THE E-TENDER NOTICE DATED 20.10.2019 PUBLISHED BY THE 2ND RESPONDENT

¶219

EXHIBIT P2 A LETTER ISSUED BY THE 3RD RESPONDENT TO ONE OF A BIDDER PARTICIPATED IN THE ABOVE TENDER DATED 25.2.2020

¶220

EXHIBIT P3 THE TRUE COPY OF THE RE-TENDER NOTICE ISSUED BY THE 2ND RESPONDENT

¶221

EXHIBIT P4 THE TENDER APPROVAL LETTER DATED 25.11.2019 ISSUED BY THE KERALA STATE LOTTERY DEPARTMENT TO ONE VINAYAKA TRADERS

¶222

EXHIBIT P5 THE TRUE COPY OF THE INVOICE TO ONE JAYA CUTTING WORK, SIVAKASHI DATED 5/2/2020 BY THE CONTROLLER FINANCE AND ACCOUNT KERALA BOOKS AND PUBLICATION SOCIETY

¶223

EXHIBIT P6 THE TRUE COPY OF THE INVOICE TO ONE JAYA CUTTING WORK, SIVAKASHI, DATED 12/2/2020 BY THE CONTROLLER FINANCE AND ACCOUNT KERALA BOOKS AND PUBLICATIONS SOCIETY

¶224

EXHIBIT P7 THE TRUE COPY OF THE INTERIM ORDER DATED 24/04/2020 IN WRIT APPEAL NO.637 OF 2020.

¶225

EXHIBIT P8 THE TRUE COPY OF THE LETTER DATED 18/05/2020 SEND BY THE 3RD RESPONDENT.

¶226

EXHIBIT P9 A COPY OF THE AGREEMENT EXECUTED BY THE 3RD RESPONDENT DURING THE FINANCIAL YEAR FEBRUARY 2017-2018.

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WP(C) No.6241,6643,6940,7173&7526/2020

¶228

:31:

¶229

EXHIBIT P10	THE TEN	DERS	AWARD	ED TO	DIFFERENT
	PERSONS	DURI	NG THE	FINAN	CIAL YEAR
	2019-202	0 AN	D THE	AMOUNT	ACCEPTED
	RANGING	FROM	24.07	RS. TO	81.99 RS.
	FOR	THE	D	ISTRICTS	FROM
	THIRUVAN 06/07/20	ANTHA 19.	PURAM T	O KASAR	GODE DATED
EXHIBIT P11	THE TRUE DATED 02	COPY /06/2	OF THE 020.	LAWYER	NOTICE

¶230

P.M.Hassankutty v. the State of Kerala

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P.M.Hassankutty v. the State of Kerala

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