Biju S vs State Of Kerala

N. Nagaresh, J

The petitioner who is the successful bidder pursuant to Ext.P1 Notice Inviting Tender, is before this Court aggrieved by the cancellation of the tender proceedings and re-tender of the work.

The petitioner responded to Ext.P1 Notification Inviting Tenders for the work of demolition of NGO Quarters at Kollam. The upset price was fixed at Rs. 15,85,000/-. In the bid evaluation, the petitioner was found to be the highest bidder who quoted `16,01,000/-. Ext.P2 communication was issued to the petitioner informing that he is selected for the work. He was further informed that once he pay the requisite deposit, the work can be started.

To the surprise and predicament of the petitioner, the very next day on 05.10.2021, the 2nd respondent issued Ext.P3 order cancelling the award of tender in favour of the petitioner. The work was subsequently re-tendered.

The petitioner would contend that Ext.P3 cancellation of tender was effected without issuing any notice to the petitioner and without granting the petitioner any opportunity of hearing. The petitioner had quoted more than the upset price. The petitioner quoted the highest amount. Under such circumstances, the cancellation of bid in Ext.P1 is highly arbitrary and unsustainable.

The learned counsel for the petitioner submitted that Ext.P3 would indicate that the tender proceedings have been cancelled on the basis of certain doubts of manipulations. It appears that the doubt arose consequent to an anonymous call. If on the basis of mere doubt, tender proceedings are cancelled, that will not be a healthy practice and that will be highly arbitrary also.

The learned counsel for the petitioner submitted that pursuant to Ext.P1, as many as eight persons were participated in the tender proceedings. None of the participants have raised any complaint regarding the tender process. The petitioner has quoted an amount above upset price. The 2nd respondent therefore ought not have cancelled the tender proceedings.

The 2nd respondent entered appearance and filed a statement through the Senior Government Pleader. The 2nd respondent submitted that the opening of the tender was on 04.10.2021 and the petitioner was found to be the highest bidder. Therefore, a communication was given to the petitioner that he was selected. However immediately thereafter, a complaint was received alleging manipulations in the tender process. The Special Branch of the Police also reported that all the persons who participated in the tender, were nominees of the petitioner and therefore the bidders did not quote an amount higher than Rs. 16,01,000/-. Since there was strong doubts of the process of tender and the strong likelihood of manipulation, Ext.P1 was cancelled in larger public interest.

The learned Government Pleader submitted that Clause 2116.2 of the PWD Manual governs the issue of termination of contract. In this case, no agreement was executed by the petitioner with the Government. The cancellation was prior to any such agreement. Therefore the petitioner cannot be said to be aggrieved by violation of any contract.

The learned Government Pleader also pointed out that in view of paragraph 6.5.1 of Standard Bid Document, the tender authority has absolute power to accept or reject any tender. Since the tender authority has such power under Standard Bid Document, Ext.P3 cannot be said to be illegal or irregular. The petitioner does not have any vested right to execute an agreement with the 2nd respondent for executing the work. It is absolutely within the discretion of the authorities whether to accept a tender and enter into an agreement with any particular person. In the circumstances, the writ petition is devoid of any merit. Ext.P1 proceedings were rightly cancelled for good and sufficient reasons.

I have heard the learned counsel for the petitioner and the learned Senior Government Pleader representing the respondents.

From the pleadings and arguments made in the matter, it is evident that the petitioner had quoted Rs. 16,01,000/- for the work in question and the respondents decided to award the work to the petitioner. However there were certain complaints and the Special Branch of the Police also informed the 2nd respondent that there is strong likelihood of manipulations occurred in the tendering process in as much as all the persons participated in the tender proceedings were likely to be the nominees for the petitioner. That is the reason for there being no competitive bid in response of Ext.P1.

The statement filed by the 2nd respondent would indicate that only 8 persons participated in the tender process pursuant to Ext.P1 notification dated 20.09.2019. However when the fresh tender was quoted as per Annexure R2(a), as many as 81 bidders participated. Similarly, the amount of Rs. 16,01,000/- was enhanced to Rs.40,03,000/- in the re-tender. The fact that tender proceedings pursuant to 20.09.2019, only 8 persons participated and in the tender proceedings pursuant to Annexure R2(a), 81 participants would indicate that the proceedings initiated pursuant to Ext.P1 was not an effective auction process. The amount has also increased considerably.

The learned counsel for the petitioner submitted that since the amount quoted by the petitioner is above the upset price, the respondent should not be permitted to re-tender the work. If such practice is followed by the respondents it would give way to manipulations in the tender proceedings. Taking into consideration the totality of the circumstances, this Court is not inclined to interfere in Annexure R2(a) tender proceedings for the reason that by re-tender, the amount has been doubled as against 16,01,000/-. The State exchequer will be benefited by an additional Rs. 24 lakhs.

At the same time, the fact remains that there were certain complaints regarding the tender process and the Special Branch has given a report in the matter. In the circumstances, while dismissing the writ petition, the 1st respondent is directed to pursue the enquiry in respect of the alleged manipulations occurred pursuant to Ext.P1 tender notification. Such enquiry should be done as early as possible.

The writ petition is dismissed with the above observations.