Dismissed

G S Constructions v. Kerala Minerals and Metals Limited

Kerala HC11 Oct 2022WP(C)/22647/2022

Case brief

AI extract

What is this about?

A construction firm challenged the rejection of its lowest tender by KMML, claiming dismissal was malicious. The Court held the employer could blacklist and reject the lowest bid due to legitimate safety concerns, dismissing the petition.

What did the court decide?

The writ petition seeking issuance of writ of certiorari and mandamus to quash rejection or allot work was dismissed.

G S Constructions Vs Kerala Minerals and… — Contract and Commercial Disputes | Kerala HC (2022)

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W.P.(C)No.22647/2022

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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 V.G.ARUN

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TUESDAY, THE 11^TH DAY OF OCTOBER 2022 / 19TH ASWINA, 1944 WP(C) NO. 22647 OF 2022

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PETITIONER/S:

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G S CONSTRUCTIONS KULANGARA, VENGARA, THODIYOOR NORTH P.O., KARUNAGAPAPALLY, KOLLAM- 690518, REP. BY ITS MANAGING PARTNER. MURALEEDHARAN PILLAI, S/O THANKAPPANPILLA, AGED 47 YEARS, 26B, POCKET B, SFS FLATS,MAYUR VIHAR PHASE III DELHI BY ADVS. SAIBY JOSE KIDANGOOR BENNY ANTONY PAREL ANOOP SEBASTIAN PRAMITHA AUGUSTINE IRINE MATHEW ADITHYA KIRAN V.E ANJALI NAIR NAAIL FATHIMA ABDULLA A.

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RESPONDENT/S:

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1 KERALA MINERALS AND METALS LIMITED (KMML) , REP. BY ITS MANAGING DIRECTOR, SANKARAMANGALAM, CHAVARA, KOLLAM, - 691 583

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2 THE CHAIRMAN THE KERALA MINERALS & METALS LIMITED (KMML) ,SANKARAMANGALAM, CHAVARA, KOLLAM, - 691 583

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3 HEAD OF DEPARTMENT THE KERALA MINERALS & METALS LIMITED (KMML) SANKARAMANGALAM, CHAVARA, KOLLAM, - 691 583

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4 TENDER INVITING AUTHORITY (TIA) THE KERALA MINERALS & METALS LIMITED (KMML) SANKARAMANGALAM, CHAVARA, KOLLAM, - 691 583 BY ADV LATHA ANAND

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W.P.(C)No.22647/2022

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 6.10.2022, THE COURT ON THE 11//10/2022 DELIVERED THE FOLLOWING:

W.P.(C)No.22647/2022

V.G.ARUN J.

W.P.(C) No.22647 of 2022

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Dated this the 11th day of October 2022

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JUDGMENT

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The petitioner is a partnership firm engaged in the business of construction and mechanical contracts. The petitioner has been executing works for the first respondent/Kerala Minerals and Metals Ltd. (KMML for short) for the past many years. By Ext.P7, the first respondent invited tender for the work “ Design Validation, Fabrication, Painting, Erection, Testing & Commissioning of Piping works from new cooling tower to main distribution header at TP unit of KMML” . The petitioner also submitted its bid. The technical bids were opened and evaluated on 21/04/2022. Thereafter, the financial bids were opened and the petitioner was found to be the lowest bidder, having quoted Rs.53.56 Lakhs + GST. In spite of petitioner being the lowest tenderer, the contract was not awarded in its favour. Instead, notice was issued, informing the petitioner that its bid was rejected during financial evaluation for the reason, “Debarred from KMML due to safety violation”. Thereafter, the

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work was notified for re-tender as per Ext.P12. Aggrieved, this writ petition was filed seeking the following reliefs;

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i). Issue a writ of certiorari or other appropriate writ

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W.P.(C)No.22647/2022

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or direction to call for the records leading up to the proceedings pursuant to Exts.P11 and P12, and quash the same.

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ii). Issue a writ of mandamus or other appropriate writ or direction directing the Respondents to consider the tender submitted by the petitioner based on Ext.P7 tender and allot the same to the petitioner who has successfully cleared the pre-qualification stage.

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iii). Issue a writ of mandamus or other appropriate writ or direction directing the 4th respondent to consider and pass appropriate orders on Ext.P13 representation.

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Adv. Saiby Jose Kidangoor, learned Counsel for the petitioner, submitted that the decision to reject the petitioner's bid and to retender the work are patently illegal and ill-motivated. It is submitted that the petitioner had been entrusted with minor works as well as works of critical nature by the first respondent for almost thirty years. There was no complaint regarding the quality of the work executed by the petitioner. Recently, certain high ranking officials of the first respondent tried to compel the petitioner to ascertain from participating in some of the tenders, so that such works could be awarded to their near and dear. The petitioner not only rejected the request but also submitted Ext.P1 complaint submitted before the Chief Secretary. This gave rise to animosity and issuance of communications alleging laches and negligence in the execution of works. Finally, the petitioner was issued with Ext.P2 communication

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W.P.(C)No.22647/2022

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informing the decision to exclude it from works of critical nature for a period of six months with effect from 14/2/2022. According to the learned counsel, even after issuance of Ext.P2, the petitioner was allowed to participate in tenders for award of critical works. Later, the petitioner was issued with Ext.P5 letter dated 4/5/2022 based on an incident alleged to have occurred on 29/4/2022 while erecting the pre fabricated truss for supporting cable trays and effluent pipelines. It was alleged that the accident had occurred due to the petitioner's failure to engage qualified and skilled riggers for the job. It was also stated that, having repeatedly violated the safety norms resulting in accidents, it was decided to stop engaging the petitioner for works in the TP unit of KMML until further orders. It is contended that, even after issuance of Ext.P5, the petitioner has been continuing the works awarded to it.The learned counsel strenuously argued that, the rejection of petitioner's tender after technical and financial evaluation is ex facie illegal.

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Adv.Vishnu S.Arikkattil, learned Counsel appearing for the respondents refuted the petitioner's allegations and put forth the following contentions ;

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It is true that petitioner was being engaged for various engineering works in the first respondent company. Of late, due to the negligence of petitioner's employees, series of accidents occurred

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W.P.(C)No.22647/2022

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at the work sites, resulting in huge loss to the company. The petitioner also failed to execute some of the works within time. This had resulted in the petitioner being issued with Exts.R1(a) to R1(c), R1 (e) and R1(f). After due consideration of petitioner's explanation, the first respondent decided not to engage the petitioner for the minor and critical works. In the meanwhile, the petitioner participated in the tender notified as per Ext.P7, quoted the lowest rate. By this time, the grave laches in the pending works, leading to accident at the work site and the decision not to award further works to the petitioner was brought to the notice of the Committee. Therefore, it was decided to reject the petitioner's tender and to re-tender the work. It is for the employer to decide whether to award the tender to the lowest bidder or cancel the tender and go for a re-tender. In the instant case, on finding the lowest tenderer/petitioner to be disqualified, the first respondent had no alternative but to reject the lowest tender and go for re-tender of the work. Reliance is placed on the decision in State

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of Jharkhand and Ors v. cwe -Soma Consortium [(2016) 14 SCC

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172], to contend that there is no obligation on the part of the tendering authority to accept the lowest tender. It is contended that the dispute involved being purely private in nature and arising out of a contract, no interference by the writ court is warranted.

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The petitioner is excluded from works of critical nature for a

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W.P.(C)No.22647/2022

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period of six months from 14/2/2022 and from contract works in TP Unit of the first respondent until further instructions. A series of communication was issued to the petitioner pointing out negligence, laches and delay in execution of the work and warranting immediate remedial steps. Although Counsel for the petitioner alleged that the communications were issued with the mala fide intention of preventing petitioner's participation in future tenders, no material is produced to substantiate the allegation. The contention that, even after Exts.P2 and P5, the petitioner was awarded with works of critical nature by the Company, is refuted by the respondents. The said factual dispute cannot be decided in this writ petition.

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The other contention is that, having found the petitioner to be technically qualified and the lowest tenderer, its tender could not have been rejected or the work re-tendered. In this regard, it is pertinent to note that the incident on 29/4/2022, which resulted in the petitioner being issued with Ext.P5 communication, had occurred after evaluation of bids. Earlier also, the petitioner was issued with communications pointing out latches and negligence on the part of its employees. The decision to reject the petitioner's tender was taken after considering these aspects. As rightly contended by the learned Counsel for the respondents, the employer is empowered to reject the lowest tender in the best interest of the company. Going by the

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W.P.(C)No.22647/2022

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precedents on the point, fair play at the joints is necessary a concomitant for all administrative bodies. The position has been clarified by the Apex Court in Patel Engineering Ltd.v.Union of India(UOI) and Ors.(AIR 2012 SC 2342) , the contextually relevant portion of which is extracted here under;

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"12. It follows from the above Judgment that the decision of State or its instrumentalities not to deal with certain persons or class of persons on account of the undesirability of entering into contractual relationship with such persons is called blacklisting. State can decline to enter into a contractual relationship with a person or a class of persons for a legitimate purpose. The authority of State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such power. The only legal limitation upon the exercise of such an authority is that State is to act fairly and rationally without in any way being arbitrary – thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors."

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The afore discussion leads to the only conclusion that decision

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to reject the petitioner's tender and to re-tender the work warrants no interference. In the result, the writ petition is dismissed.

Sd/-

V.G.ARUN Judge

dpk

W.P.(C)No.22647/2022

APPENDIX OF WP(C) 22647/2022

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PETITIONER EXHIBITS

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Exhibit P1	TRUE COPY OF THE COMPLAINT PREFERRED BY THE PETITIONER BEFORE THE HON'BLE CHIEF SECRETARY DATED 09.12.2020
Exhibit P2	TRUE COPY OF THE LETTER DATED 18.02.2022 ISSUED BY THE RESPONDENT
Exhibit P3	THE DETAILS OF THE WORKS COMPLETED, AWARDED AND IN PROGRESS MOSTLY AFTER EXHIBIT P2 BEING CARRIED OUT BY THE PETITIONER
Exhibit P4	TRUE COPY OF THE WORK ORDER DETAILS DATED 29.04.2022
Exhibit P5	TRUE COPY OF THE INCIDENT REPORT DATED 04.05.2022
Exhibit P6	TRUE COPY OF THE LETTER DATED 25.05.2022 ISSUED BY THE 2ND RESPONDENT
Exhibit P7	TRUE COPY OF THE NOTICE INVITING TENDER WITH TENDER REF TP/PROJ/CWP /01 ISSUED BY THE RESPONDENT
Exhibit P8	TRUE COPY OF THE BID SUBMISSION CONFIRMATION DATED 19.03.2022 FOR THE TENDER WITH REF NO. TP/PROJ/CWP/01
Exhibit P9	TRUE COPY OF THE ACCEPTANCE NOTIFICATION DATED 21.04.2022 SHOWN IN THE OFFICIAL WEBSITE STATING THAT THE PETITIONER'S BID HAS QUALIFIED THE TECHNICAL EVALUATION
Exhibit P10	TRUE COPY OF THE MAILS PREFERRED BY THE PETITIONER DTD 22.4.2022
Exhibit P11	TRUE COPY OF THE REJECTION STATUS WHICH WAS SHOWN ON THE OFFICIAL WEBSITE OF THE 1ST RESPONDENT COMPANY DATED 09.06.2022
Exhibit P12	TRUE COPY OF THE BID LIST DETAILS OF THE RE-ISSUED TENDER WITH TENDER ID 2022_KMML_493655_1 AND TENDER REF NO. TP/PROJ/CWP/02 DTD 9/7/2022
Exhibit P13	TRUE COPY OF THE REPRESENTATION DATED

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W.P.(C)No.22647/2022

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4.07.2022 PREFERRED BY THE PETITIONER

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RESPONDENT EXHIBITS Exhibit R1(A)	TRUE COPY OF THE LETTER DATED 04/05/2022 ISSUED BY KMML TO THE PETITIONER
Exhibit R1(B)	TRUE COPY OF THE LETTER DATED 09/08/2021 ISSUED BY THE HEAD OF THE DEPARTMENT (MAINTENANCE) TO THE PETITIONER
Exhibit R1(C)	TRUE COPY OF THE INTERNAL NOTE DATED 17/01/2022 ELABORATING THE INCIDENT OF KMML
Exhibit R1(D)	TRUE COPY OF THE LETTER DATED 09/05/2022 ISSUED BY THE PETITIONER TO THE HEAD OF THE T.P UNIT
Exhibit R1(E)	TRUE COPY OF THE LETTER DATED 13/05/2022 ISSUED BY THE HEAD OF THE U NIT (TP/STP) TO THE PETITIONER
Exhibit R1(F)	TRUE COPY OF THE LETTER DATED 25/05/2022 ISSUED BY THE HEAD OF THE DEPARTMENT (MAINTENANCE) TO THE PETITIONER
Exhibit R1(G)	TRUE COPY OF THE NOTIFICATION DATED 10/06/2022
PETITIONER EXHIBITS
Exhibit P14	TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT DATED 21/10/2009
Exhibit P15	TRUE COPY OF THE IMAGES TAKEN FROM TH WEBSITE INDICATING THE CRITICAL NATURE OF THE WORKS THAT ARE BEING CARRIED OUT BY THE PETITIONER IN THE RESPONDENT COMPANY
Exhibit P16	TRUE COPY OF THE TENDER INVITATION DATED 06/10/2021 ISSUED BY THE RESPONDENT
Exhibit P17	TRUE COPY OF THE FRESH INVITATION FOR TENDER DATED 07/10/2021 ISSUED BY THE RESPONDENT

G S Constructions v. Kerala Minerals and Metals Limited

Case brief

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G S Constructions v. Kerala Minerals and Metals Limited

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