G.Harikumar vs The Travancore Devaswom Board on 8 March, 2017

[Cites 4, Cited by 2]

Kerala High Court

G.Harikumar vs The Travancore Devaswom Board on 8 March, 2017

Unilateral cancellation of tender after confirmation of the bid in favour of the petitioner and accepting 50% of the due amount in terms of the tender conditions; that too, without issuing any notice or opportunity of hearing, for no sustainable reason, in quite an arbitrary manner and allegedly on malafides, is the subject matter of challenge in this writ petition.

2. The respondent Devaswom Board invited e-tender for various activities carried out in different Temples under the Devaswom for the year 2017 - '18 and intimation in this regard was published as per Ext. P1 dated 27.02.2017, in the 'Mathrubhoomi' daily dated 02.03.2017. As per Ext. P1 everybody was let known that details of the tender have already been published in the web site of the Devaswom, besides mentioning that interested parties could contact the Deputy Devaswom Commissioner and Assistant Devaswom Commissioner in this regard.

W.P.(C) No. 9721 of 2017 : 2 :

3. Pursuant to the said notification, the petitioner collected further particulars. Ext. P2 forms the tender conditions, which stipulate that the successful bidder had to execute an agreement in terms of the tender conditions; that 50% of the due amount had to be remitted on the date of opening/confirmation itself and that the balance 50% had to be satisfied as specified therein; besides stating that further details are available in the website of the Devaswom Board and also in the office of the Deputy Devaswom Commissioner and Assistant Devaswom Commissioner. Ext. P2 (a) forms compilation of the General conditions/Special conditions.

4. As per the terms of tender, it had to be submitted 'online' and the application itself was to have a registration fee of Rs.500/-. In respect of Temples under the Ettumanoor Devaswom, the minimum tender amount for getting the right to sell pooja articles in the premises of the Temple was Rs. 90,38,700/- and the EMD stipulated was Rs.9,03,800/-. According to the petitioner, he satisfied all the qualifications/requirements prescribed for participating in the tender and accordingly, he submitted his tender on 07.03.2017, well within the time. Web site of the Devaswom was open from 04.03.2017 to 10.03.2017. Ext. P3 is the bid W.P.(C) No. 9721 of 2017 : 3 : submission confirmation dated 08.03.2017, which reveals the transaction status as successful. As per the terms of the tender, e-bids were to be opened on 14.03.2017.

5. As a matter of fact, apart from the petitioner, another person also had sought to participate in the tender. On opening the tenders on 14.03.2017, it was found that petitioner's bid was higher than that of the other and accordingly, it was accepted by the Devaswom and the petitioner was required to satisfy 50% of the due amount then and there, in conformity with terms of the tender. Taking steps on war footing, the petitioner remitted a sum of Rs. 47,75,501/- through the State Bank of Travancore, in favour of the Devaswom Accounts Officer, payable at Ettumanoor Branch, as prescribed. Ext. P4 is the receipt issued by the Devaswom in this regard. The petitioner was pursuing further steps, making necessary arrangements to meet such other requirements for commencing operation from 01.04.2017.

6. While so, on browsing through the particulars in the web site, the petitioner found that the tender inviting authority had issued Ext. P5 dated 18.03.2017 stating that the tender had already been cancelled due to administrative reasons/issues. W.P.(C) No. 9721 of 2017 : 4 : Immediately, the petitioner contacted the authorities of the Devaswom, when he was told that it was cancelled because of some complaints. According to the petitioner, it was only to favour somebody of the choice of the Devaswom, to see that the petitioner was ousted from the field. This made the petitioner to approach this Court, mainly contending that the tender was cancelled for no reason at all and that it was quite an arbitrary exercise of power on extraneous consideration, as projected in Grounds 'H' and 'I' of the writ petition. It was also pointed out that the petitioner was never given any notice of hearing before passing adverse orders against him, cancelling the tender and proceeding to re-tender the item, including the steps for re-issuance of notification to be finalized on 28.03.2017.

7. After hearing the learned counsel for the petitioner and the learned standing counsel for the Devaswom Board, the writ petition was admitted by another Bench of this Court, also granting interim order of stay for a period of 'one month', as per order dated 22.03.2017. Immediately thereafter, the Devaswom Board filed a counter affidavit dated 28.03.2017 producing copies of some documents as Exts. R1 (a) to (g), seeking to sustain their stand. W.P.(C) No. 9721 of 2017 : 5 : The Devaswom Board filed an I.A. No. 5582 of 2017 to vacate the interim order of stay and to permit them to proceed with re-tender of the contract for the right to sell pooja items in the Ettumanoor Temple group for the year 2017 - '18. The petitioner filed a reply affidavit rebutting the averments raised in the counter affidavit.

8. When the matter came up for consideration yesterday, the matter was heard in detail. Sri. K. Srikumar, the learned senior counsel addressed the Court on behalf of the petitioner and Sri. N. N. Sugunapalan, the learned senior counsel addressed the Court on behalf of the Devaswom Board.

9. The sum and substance of the submissions made by the learned senior counsel for the Devaswom, with reference to the materials on record, is that cancellation of the tender was done in 'public interest' and never to extend any undue benefit to anybody. It is stated that the petitioner does not have any vested right to have the tender finalized in his name and that, it was always open for the Devaswom to reject the tender or decide not to accept the tender for various reasons. It is also pointed out by the learned senior counsel that, after opening the tender on 14.03.2017, a complaint was filed by a person by name Mr. K.P. Santhosh before W.P.(C) No. 9721 of 2017 : 6 : the second respondent/Deputy Commissioner, pointing out that there was no proper publication of tender; that no other interested person, including him could not participate in the tender for want of publication and that the chance to obtain more amount/revenue to the Devaswom was defeated. Another complaint, almost in similar terms, was filed by the Secretary to the Ettumanoor Sri Mahadeva Temple Advisory Committee on the same day; i.e. on 15.03.2017 as borne by Ext.R1(d).

10. On receipt of the said complaints, the grievance was looked into and based on the report submitted by the Deputy Devaswom Commissioner on 15.03.2017 itself, the second respondent/Commissioner observed that, though the time to submit the tender as stipulated in the notification published in the 'website of the Devaswom' was upto 9 a.m. on 10.03.2017, as per the notice published in the office of the Assistant Devaswom Commissioner, it was upto 11 a.m. on 10.03.2017. Referring to the complaints received as to the loss of opportunity, the Commissioner decided to cancel the Tender and Ext. R1(e) order was passed on 16.03.2017, directing to return the amount remitted by the petitioner forthwith and to have the retender conducted on W.P.(C) No. 9721 of 2017 : 7 : 28.03.2017 at 11 a.m. This, according to the Devaswom, is not tainted in any manner and is not assailable under any circumstances.

11. Ext. R1(f) is the notification dated 17.03.2017 in respect of the 're-tender', stipulating that the interested parties could submit e-tenders between 11 a.m. on 17.03.2017 and 11. a.m. on 25.03.2017 and further that the tenders will be opened on 28.03.2017 at 11 a.m. A similar notification was published in the website of the Devaswom as well, mentioning the date, time and other particulars. Placing reliance on the rulings rendered by the Apex Court in Rishi Kiran Logistics Private Limited Vs. Board of Trustees of Kandla Port Trust and others [(2015) 13 SCC 233] and South Delhi Municipal Corporation Vs. Ravider Kumar and another [(2015) 15 SCC 545], the learned senior counsel for the Devaswom submits that cancellation of tender and subsequent re-tender have been necessitated, in view of the mistakes crept in the tender notification; that the decision for re-tender has been taken as a measure of bonafides; that there is no plea of malafides; and further that it is in public interest.

12. The version of the respondent Board is sought to be W.P.(C) No. 9721 of 2017 : 8 : rebutted by the learned senior counsel appearing for the petitioner, pointing out that judicial interference is necessitated when the power exercised by the authority is arbitrary or un-reasonable. It is pointed out that the reason stated in Ext. R1(e) order passed by the second respondent/Commissioner is entirely different from the grievance projected by the two complainants as per Ext. R1(c) and R1(d), which formed the basis for cancelling the tender. The learned counsel also submits that the web site was open from 04.03.2017 to 10.03.2017 till 9 a.m. and that there was no grievance for anybody, who was actually desirous of participating in the bid, with reference to the difference in the time specification [upto 11 a.m. as published in the Notice Board of the Assistant Devaswom Commissioner and 9 a.m. as in web site of the Devaswom]. It is also pointed out that, Exts. R1 (c) and R1(d) complaints came to be filed only after finalization of the tender in favour of the petitioner, presumably at the instance of the person who lost the tender after competing with petitioner and who was continuing to manage in obtaining the bid for the past several years. The learned counsel submits that the reliance sought to be placed on the decisions of the Apex Court cited from the part of the W.P.(C) No. 9721 of 2017 : 9 : respondent is not correct, as not applicable to the case in hand and on the other hand, it is to be governed by the principles laid down by the Apex Court in Jagdish Mandal Vs. State of Orissa and Others [(2007) 14 SCC 517]. It is asserted by the learned counsel that this is a clear case of malafides, as specifically pleaded in Ground H & I of the writ petition and that cancellation of Tender was effected without any application of mind, and absolutely without any rhyme or reason, but on extraneous circumstances.

13. After hearing both the sides, this Court finds that the primary question to be considered is whether the "decision making process" done by the second respondent is correct or sustainable. There cannot be any dispute with regard to the law declared by the Apex Court, as to the scope of judicial scrutiny. Similarly, there cannot be any dispute to the fact that nobody can claim, as a matter of right, that his tender has to be accepted, once he becomes the lowest/highest tenderer, as the case may be. It is always possible for the tenderer to accept or reject the tender, even if the bidder happens to be highest or lowest, as the case may be, with reference to the number of participants, possible revenue collection, chance for more tenderers to participate, providing for W.P.(C) No. 9721 of 2017 : 10 : healthy competition on wider publication etc, which are some of the factors to be considered. Whether such an analytical and rational approach has been done by the second respondent, while cancelling the tender as in the instant case, is the main point to be looked into.

14. On examining the issue as to whether the "decision making process" is correct or not, it is to be noted that there was absolutely no complaint from any corner with regard to the tender proceedings till 15.03.2017. The participation was by "e-tender", which by itself is a device to maintain utmost confidentiality and transparency. As per the tender conditions, it was open for the interested parties to submit their e-tenders from 04.03.2017 till 10.03.2017. Only two tenderers were there, as on the date of closing of the tender, which were opened on 14.03.2017. Nobody had come up before the Devaswom Board, with any complaint at any point of time from the date of notification till 10.03.2017 - the last date for submitting the tender or even thereafter till and including on 14.03.2017 - the tenders were opened and finalized, with the grievance; that no sufficient opportunity was obtained to participate in the tender; nor that they were prevented in any W.P.(C) No. 9721 of 2017 : 11 : manner from submitting the tender. There was no case that the website of the Devaswom was closed prior to the actual time limit specified in the tender notification.

15. Complaint comes up for the first time on the next day after opening of the tender, after confirming the same by the Devaswom in favour of the petitioner [he being the highest bidder] and after collecting 50% of the due amount in terms of the tender conditions, as borne by Ext. P4 receipt. Only two complaints were received by the Devaswom, as admitted by them in the counter affidavit and also as borne out by the proceedings, one by Mr.Santhosh K.P. [Ext. R1(c)] and the other one by Mr. Sree Kumar [Ext. R1 (d)]. Grievance in Ext. R1 (c) is that the complainant was desirous of participating in the tender and that he could not participate as there was no publication of the tender either in any of the newspaper or website of the Devaswom. The said version is cent per cent contrary to the facts. Newspaper advertisement was issued by the Devaswom, as borne by Ext. P1 and it was published in the website of the Devaswom, as borne by Ext. P2. The publication of Tender at different levels is asserted by the second respondent/Commissioner himself, in Ext. R1(e) order, W.P.(C) No. 9721 of 2017 : 12 : where it has been stated that the Tender was published in the e-tender website of the State Government, in the official website of the Devaswom Board and also in the office of the Deputy Commissioner, Ettumanoor and in the office of the Assistant Deputy Commissioner, Ettumanoor. This being the position, the idea and understanding of the complainant in Ext.R1(c) is thoroughly wrong and misconceived and he cannot be considered as a genuine party, who wanted to participate in the tender, but for one who was virtually sleeping over the rights, if any, till 15.03.2017 i.e. till the tender proceedings were finalized on the previous day. Exactly similar is the insinuation made by the person by name K.N. Santhosh Kumar, stated as the Secretary of the Ettumanoor Maha Deva Temple Advisory Committee, as averred in Ext. R1(d) complaint. There is absolutely no merit or bonafides in the said complaint as well; being 100% contrary to the actual facts. It was with reference to these two complaints, that a report was submitted by the Deputy Commissioner on 15.03.2017 and the matter was considered by the second respondent/Commissioner, who passed Ext. R1(e) order cancelling the Tender.

16. Quite strangely, the Commissioner has found out a W.P.(C) No. 9721 of 2017 : 13 : reason to cause the Tender to be cancelled. It is with reference to different timings mentioned in the notice published in the office of the 'Assistant Devaswom Commissioner' and that appeared in the official website of the Devaswom Board, specifying the last date and time for submitting the tender. In the notice published in the office of the former, it was mentioned as till 11 a.m. on 10.03.2017; whereas in the case of the latter [official web site of the Devaswom Board], it was mentioned as till 9 a.m. on 10.03.2017. The difference is by 'two hours'. Nobody had any grievance that, though he had sought to submit tender before 11 a.m. on 10.03.2017, it was refused to be accepted or that he could not submit such e-tender, as the web portal of the Devaswom Board was closed by 9 a.m. on 10.03.2017. A vague reference is made in second paragraph of Ext. R1 (e) order, that somebody had raised voice in this regard stating that he could not participate in the Tender and that re-tender was sought for. Such reference is obviously focused to Ext. R1(c) complaint filed by Mr. K. P. Santhosh. Some reference is made to the news item appeared in the 'Mangalam' daily dated 16.03.2017 as well.

17. Sri. Santhosh and Sri. Sreekumar have not stated any W.P.(C) No. 9721 of 2017 : 14 : such case in Exts. R1(c) and R1(d) complaints that, by virtue of the difference in timings on the last date for submitting the Tender i.e. on 10.03.2017, they could not participate in the process. On the other hand, their case, as mentioned already, is that no publication of Tender notice was ever made by the Devaswom, either in newspapers or in the official website, which is obviously wrong, as publication was effected in the official website, newspaper and notice board, as conceded by the second respondent Commissioner in the opening paragraph of Ext. R2(e) order. This being the position, in so far as there was no complaint for any genuine party [who actually wanted to participate in the Tender and lost chance because of the different timings on the last day of submission of the tender], the Commissioner ought not to have cancelled the Tender, which was properly finalized after publication, giving opportunity to submit Tender from 04.03.2017 to 10.03.2017, that too, after deciding to confirm the same in favour of the petitioner, making him to pay 50% of the due amount in terms of the tender conditions on the date of opening of the tender itself and above all, without hearing the affected party.

18. When there was no such case for the two sole W.P.(C) No. 9721 of 2017 : 15 : complainants in Ext. R1 (c) or R1 (d); for whose tune the Commissioner was dancing, by passing Ext. R1 (e) order, cancelling the Tender, which otherwise was valid in all respects and accepted, ordering re-tender, remains to be a matter of mystery. This is more so, when action was taken within 24 hours of submitting Exts. R1(c) and R1 (d) complaints on 15.03.2017 [after finalization of the Tender on 14.03.2017], alleging non-publication of the Tender, by calling for and obtaining a report from the Deputy Commissioner on that day itself i.e. on 15.03.2017, in turn cancelling the Tender on 16.03.2017. Nowhere in the counter affidavit of the second respondent, has he stated that cancellation of the Tender was for any other reason, much less any sustainable reason, nor is there any case that any notice was issued to the petitioner before cancellation, giving him an opportunity to show cause, why it shall not be cancelled. How such an order came to be passed by the second respondent/Commissioner, who was reportedly a member of Higher Judicial Service of Kerala, in violation of the fundamental rule of "audi alteram partem", is also not known. Absolutely, no public interest is made out in the course and proceedings pursued by the second respondent/Commissioner in having issued W.P.(C) No. 9721 of 2017 : 16 : Ext.R1(e).

19. Coming to the reliance sought to be placed by the Devaswom on the verdict passed by the Supreme Court in (2015) 13 SCC 233 [cited supra], it was a case where plots were allotted to the appellant on becoming successful in the 'price bids' opened on 30.08.2005 in respect of the lease holds rights; mentioning clearly that formal letter will be issued after CRZ clearance. There occurred much delay in getting CRZ clearance and such other clearance from the Ministry of Environment and Forest, Government of India. In fact, CRZ clearance was obtained only on 16.08.2010 i.e. after about 5 years. The prolonged time lag and adverse consequences made the Board of Trustees of the Port Trust (Custodian) to pass resolution on 09.12.2010 deciding to cancel the Tender floated in the year 2005; which came to be challenged before the High Court of Gujarath and later before the Apex Court. Referring to the facts and figures, the Apex Court held that there was no plea of malafides and that the decision taken by the Port Trust could not be said as arbitrary. It was also made clear that the doctrine of 'promissory estoppel' or 'legitimate expectation' was not attracted. Referring to the law declared on the point, it was W.P.(C) No. 9721 of 2017 : 17 : observed that, once 'public interest' was accepted as the superior equity, it would override the individual equity. It was accordingly held that, there was no merit and the appeals were dismissed, declining interference. The said decision does not come to the rescue of the petitioner in any manner. On the other hand, that by itself is an authority to hold that, if there is specific plea of malafides and the position brought out is not properly controverted or if the decision taken by the authority is arbitrary or unreasonable, it is quite possible to have judicial interference. In the instant case, the reason for interference stated in Ext. R1(e) order is with reference to Exts. R1 (c) and R1 (d) complaints, which in fact stands diametrically opposite of the contents in Ext. R1(c)/ R1(d) complaints. Since there is no case for the Devaswom that the bid already finalized in favour of the petitioner on 14.03.2017 was bad in any manner or was detrimental to the interest of the Devswom, either for insufficient revenue/bid amount or otherwise, no interference ought to have been made by the Commissioner. There is total non-application of mind on his part.

20. In [2015] 15 SCC 545 (cited supra) the party respondents were declared as successful bidders, being the lowest W.P.(C) No. 9721 of 2017 : 18 : in respect of different items of Tender. Despite this, the work was not allotted and on enquiry, the Tender was stated as cancelled on administrative reason. This was under challenge before the High Court of Delhi, where interference was made and the cancellation orders were set aside, directing the bid to be finalized in favour of the writ petitioners. The Apex Court observed that there was no plea of malafides or any case for the petitioners that the intention on the part of the awarder/Municipal Corporation was to award Tender in favour of some one else of their choice. It was noted as only to serve the best interest of the Corporation, to attract more bidders and secure better revenue. It was observed that in respect of the same financial year 2012 - '13, the appellant Corporation had issued 72 other work orders in respect of similar works in the adjoined area of the Corporation and all of them had quoted much lower rates than the rate quoted by the respondent/writ petitioner. There were 'CVC guidelines' as well, to ensure that the Corporation gets the best price for execution of works; at the same time to ensure transparency in the contract. It was accordingly, that the appellant Corporation acted bonafide, to get the best price for execution of works and to protect the public money. In so far W.P.(C) No. 9721 of 2017 : 19 : there was no violation of Article 14 of the Constitution of India, the Apex Court held that the interference made by the High Court was not correct or sustainable. This was more so, when no finding was rendered by the Delhi High Court to the effect that any malafide exercise was there on the part of the appellant Corporation in cancelling the earlier Tender, with a view of to favour some one. Accordingly, the verdict passed by the Delhi High Court was set aside.

21. On applying the said law to the given set of admitted facts, there is no case for the Devaswom that the bid amount quoted by the petitioner was lower in any manner or that the Devaswom wanted to go for wider publicity and fresh Tender for procuring more revenue. This could have been done by Devaswom then and there, without accepting the Tender or confirming the same in favour of the petitioner on 14.03.2017. Admittedly, the due amount quoted by the petitioner is much higher than the figure finalized in the previous year. 'Base value' was fixed by the Devaswom, as discernible from Exts. P1 and P2, stipulating the same as Rs.90,38,700/- [below which it could not have been quoted] and fixing the EMD as Rs.9,03,870/-. Petitioner quoted W.P.(C) No. 9721 of 2017 : 20 : Rs.95,51,001/- as discernible from Ext. P3, which was more than that of the rival participant. It was accordingly, that the same was found higher and was accepted, confirming the bid in favour of the petitioner; in turn directing him to satisfy 50% of the due amount, in terms of the tender conditions. This was satisfied by the petitioner, as borne by Ext. P4 receipts issued by the Devaswom. It was thereafter that the order of cancellation came as a 'bolt from the blue', that too, not for the reason stated in Exts. R1(c)/R1(d) complaints, without affording any opportunity of hearing to the petitioner. Absolutely no loss of revenue or any violation of tender condition by the petitioner is brought out in Ext. R1 (e) order passed by the second respondent. The contents of Ext. R1 (e) cannot be supplemented by any volume of counter affidavit. The counter affidavit filed by the Devaswom, in fact does not improve the case any further as well. In so far as no ground for interference is made out and involvement of any 'public interest' is not substantiated, nor has any case been set up as to the probable revenue loss; cancellation of the Tender finalized in favour of the petitioner, that too, without any notice, is nothing but arbitrary and illegal, and amounts colourable exercise of power. It is held W.P.(C) No. 9721 of 2017 : 21 : accordingly.

22. The case of the petitioner was never that he was having any vested right to have alloted the Tender in his name. It is not his case that the respondent Devaswom was barred by 'promissory estoppal'; nor is it his case that he was having 'legitimate expectation', to have the Tender finalized in his name, merely on his becoming the highest tenderer. Case of the petitioner is that, having accepted the adequacy of the amount quoted by him, on his becoming successful bidder and having no complaint from any corner till the Tender was finalized on 14.03.2017 and above all, since no violation of any tender condition is brought out, the proceedings had to be taken to a logical conclusion. We find that the petitioner is entitled to succeed.

23. Accordingly, we set aside Ext.R1 (e) order passed by the second respondent Devaswom Commissioner and the subsequent proceedings in connection with re-tender. We also hold that the petitioner is entitled to be awarded the right for supplying the quoted 'pooja articles' for the year 2017 - 18 beginning from 01.04.2015. 50% of the amount deposited by him having been returned by Devaswom through Bank account, opportunity shall be W.P.(C) No. 9721 of 2017 : 22 : given to the petitioner forthwith, to have it redeposited. On effecting the same, the petitioner shall be permitted to operate the affairs throughout the season, subject to satisfaction of the requirement as per Tender. The writ petition stands allowed accordingly.

We express our extreme displeasure as to the course and events pursued by the Devaswom Commissioner, in acting quite casually, while passing Ext R1 (e) order. We find it appropriate to impose a cost of Rs.10,000/- [as stands restricted].

sd/-

P. R. RAMACHANDRA MENON, JUDGE sd/-

A. M. BABU, JUDGE kmd /True copy/ P.A. to Judge

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