Kerala High Court
Ithal Engineering Groups vs The Kerala State Electricity Board on 18 December, 2020
Author: Bechu Kurian Thomas
Bench: S.V.Bhatti, Bechu Kurian Thomas
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE S.V.BHATTI
&
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
FRIDAY, THE 18TH DAY OF DECEMBER 2020 / 27TH AGRAHAYANA,
1942
WA.No.804 OF 2020
AGAINST THE JUDGMENT IN WP(C)NO.10510/2020 OF HIGH COURT OF
KERALA
APPELLANT/PETITIONER:
ITHAL ENGINEERING GROUPS
CHELAKKARA,
THRISSUR
REPRESENTED BY ITS PROPRIETOR MANU.K.M.,
AGED 34 YEARS, S/O.MANMADHAN,
RESIDING AT KOTHARATHU HOUSE,
UDAYANAPURAM.P.O., VAIKKOM,
KOTTAYAM DISTRICT 686143
AND PROPRIETOR OF ITHAL ENGINEERING GROUPS,
CHELAKKARA,
THRISSUR-680586
BY ADV. SRI.K.SHAJ
RESPONDENTS/RESPONDENTS:
1 THE KERALA STATE ELECTRICITY BOARD
REPRESENTED BY ITS SECRETARY,
VYDYUTHI BHAVAN, PATTOM.P.O,
THIRUVANANTHAPURAM-695033
2 THE EXECUTIVE ENGINEER,
OFFICE OF THE EXECUTIVE ENGINEER,
KSEB PROJECT MANAGEMENT UNIT,
VYDYUTHI BHAVANAM, KOTTAPURAM ROAD,
THRISSUR-680004
W.A. No.804/20 -:2:-
3 M/S.GENISYS ENGINEERS AND CONTRACTORS,
TC 9/3186(INRA-A36), SANIYA VILLA,
INDIRAJI NAGAR, CHEMPAZHANTHY.P.O,
THIRUVANANTHAPURAM-695587
R1-2 BY SRI.SUDHEER GANESH KUMAR R., SC, KSEB
R3 BY ADV. SRI.THOMAS ABRAHAM (NILACKAPPILLIL)
R3 BY ADV. SMT.K.R.MONISHA
R3 BY ADV. SHRI.RESSIL LONAN
R3 BY ADV. SRI.PHILIP T.VARGHESE
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 18-12-
2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.A. No.804/20 -:3:-
JUDGMENT
Dated this the 18th day of December, 2020 Bechu Kurian Thomas, J.
Appellant challenged the award of work by the Kerala State Electricity Board (for short 'KSEB') to the 3 rd respondent pursuant to Ext.P1(a) to Ext.P1(f) tender notifications. Out of 6 works tendered, appellant was the lowest bidder in two, while the 3 rd respondent was the lowest in four. The contracts were awarded to all the lowest bidders. The learned single Judge dismissed the writ petition after finding that the writ petition lacks merit. Hence, the writ appeal at the instance of writ petitioner.
2. KSEB invited competitive online tenders for drawing 11 KV overhead line with covered conductor for a few project management unit works under the Electrical Circle, Thrissur. Pre-qualification bids were opened on 18.09.2019 in respect of tenders notified under Ext.P1(a) to Ext.P1(d) while those tenders notified under Ext.P1(e) to Ext.P1(f) were opened on 13.11.2019. As mentioned earlier, ultimately appellant was awarded the work in respect of two tenders, while the 3 rd respondent was awarded work in respect of four tenders, both of them being the lowest W.A. No.804/20 -:4:- bidders in their respective bids. In substance, the appellant challenges the award of four works to 3rd respondent.
3. The main contention raised by the appellant is that as per the tender conditions relating to 'bidders requirement' in Ext.P2, the 3rd respondent being a new entrant, does not satisfy the technical conditions stipulated therein. It was specifically emphasised that the 3rd respondent, who is a turnkey contractor, did not have the previous experience of three years in supply of covered conductors as contemplated under clause 3 of the bidder requirement and also that the type test reports of 11 KV covered conductor carried out in India, as per the norms in labs like CPRI/EDA were also not submitted along with the bid, which rendered the bid liable to be rejected. Instead of rejecting the bid, the committee for finalisation of the bid, relaxed the condition, as seen from Ext.P3, and recommended to include as a special clause in the work order to conduct the type test at the site after supply of materials. According to the appellant, when the work order was issued, a further relaxation was granted by the 2nd respondent by incorporating a clause in Ext.P5 stating that type test on the material supplied need to be carried out, only if it was found necessary.
4. We have heard Sri.K.Shaj, the learned counsel for the W.A. No.804/20 -:5:- appellant, Sri.R.Sudheer Ganesh Kumar, the learned Standing Counsel for respondents 1 and 2 and Sri. Philip T. Varghese, learned counsel for the 3rd respondent. Since the writ petition was dismissed without notice to the 3 rd respondent, they have, pursuant to the admission of this appeal, filed counter affidavit in this appeal
5. Adv. K.Shaj, vehemently contended that the rules of the game cannot be changed after the game started and the 2 nd respondent has, by the relaxation granted, acted contrary to law. He further argued that 3rd respondent as a new entrant, was bound to satisfy the conditions prescribed in Ext.P2 and in the absence of such satisfaction, the bid of the 3 rd respondent ought not to have been considered.
6. The learned Standing Counsel for respondents 1 and 2 argues that the award of all the six works to the lowest tenderers is in accordance with bid document, all requirements were verified and duly complied with, and the lowest bidders have been selected for the award of contracts. There is no reason to interfere with the award. The argument on relaxation of requirements canvassed is due to misunderstanding of checklist by the appellant and to preserve its commercial interest. In other words, there is no illegality or impropriety in the tender W.A. No.804/20 -:6:- evaluation by the Board. Referring to Ext.P3 minutes of the committee for finalisation of the award of contract, it was submitted that the experience, type test certificates and sample submitted by the participant bidders were having a few shortfalls and that both of them were treated on the same footing. It was pointed out that the appellant has Memorandum of Understanding with M/s.Raychem RPG (Private) Ltd. (Manufacturer), while the 3rd respondent had an undertaking with M/s. Havells India Ltd. (Manufacturer). The relaxations for factory acceptance test was given due to the Covid situation and no unfair procedure has been adopted. On the other hand, both the awardees of contract were treated alike.
7. On behalf of the 3rd respondent, Adv.Philip T. Varghese submitted that the writ petition was filed with the intention of creating monopoly in the contract for supply and drawing of electric lines using covered conductors. It was pointed out that the appellant had formed a cartel with another bidder and they were submitting bids at mutually agreed overpriced rates and the contracts were being compelled to be granted at the rates offered by the appellant and another bidder in respect of other works. It was also pointed out that there was no relaxation of the tender conditions in respect of the award of contract to the 3 rd W.A. No.804/20 -:7:- respondent and allegations to the contrary were baseless. He further submitted that the 3 rd respondent/a turnkey contractor is not a new entrant for the purpose of clauses 3 & 4 of bid document, in as much as M/s.Havells India Ltd., in the manufacture of covered conductors, is an experienced manufacturer. Therefore, it was not required for the 3 rd respondent to meet the additional technical conditions specified in the "bidders requirement". Referring to the terminology used in the said clause, it was argued that all conditions prescribed whether as a new entrant or as an existing entrant, the 3 rd respondent and its partner M/s.Havells India Ltd., did satisfy the conditions required for the award of contract.
8. We have considered the rival contentions. At this stage of our consideration, we remind ourselves of the jurisdiction of judicial review vis-a-vis the award of contract through tender process. It has time and again been stated by this Court as well as the Supreme Court that in matters of award of contract or tender, the decision of the master of contract ought not to be interfered with lightly. As laid down in Ramana Dayaram Shetty v. International Airport Authority of India & Others [(1979) 3 SCC 489] and Consortium of Titagarh Firema Adler S.P.A.-Titagarh Wagons Ltd. Through Authorised Signatory W.A. No.804/20 -:8:- v. Nagpur Metro Rail Corporation Limited [(2017) 7 SCC 486], the scope of judicial review in matters relating to contracts is limited and the exercise of power of judicial review is called for, only if, the approach is arbitrary or malafide or the procedure has been adopted to favour someone. We also remind ourselves that, when decisions are taken in the context of best economic interests of the master of the contract, with transparency, without any arbitrariness or discrimination, in the absence of sustainable grounds viz. malafides, the courts ought not interfere under the power of judicial review.
9. In the background of the above legal position, the only issue that requires consideration is whether the 3 rd respondent and its partner M/s.Havells India Ltd., satisfied the conditions stipulated in the clause relating to bidders requirement in Ext.P2.
10. Admittedly, the appellant as well as the 3 rd respondent are turnkey contractors, who have entered into a memorandum of understanding with manufacturers of covered conductors. The manufacturer of covered conductors must possess previous experience of three years in design, manufacture, testing and supply of covered conductors. According to the 3 rd respondent, the said condition is clearly satisfied since M/s.Havells India Ltd., W.A. No.804/20 -:9:- is one of the pioneers in supplying covered conductors in India.
11. The previous experience of M/s.Havells India Ltd., is sought to be justified for the purpose of the aforenoted conditions by reference to Annexure R3. A perusal of Anexure R3 shows that pursuant to a purchase order dated 30.01.2016, a supply of 12000 metres of Havells make 33KV aerial/covered conductors was carried out successfully to the Calcutta Electric Supply Corporation [CESC]. The said condition having been satisfied, there is no basis for the allegation that the 3rd respondent was not technically qualified.
12. Appellant's further contention is based on the assumption that the 3rd respondent is a new entrant, and hence the conditions stipulated in clause 4 and clause 5 of Ext.P2 relating to bidder requirement have not been satisfied. In our view, the said contention is baseless for two reasons. The first of the two reasons is that, as per the 'bidders requirement' clause in Ext.P2, a bid can be submitted by two types of persons (1) a manufacturer of covered conductors, or (2) turnkey contractors, who have entered into a memorandum of understanding with the manufacturers of covered conductors. The note appended to clause 4 of the bidder requirement in Ext.P2 is applicable only to the first category of persons. As far as the second category of W.A. No.804/20 -:10:- persons is concerned, it applies only to the partner of the turnkey contractor, with whom a memorandum of understanding has been executed. If M/s.Havells India Ltd., the partner of 3 rd respondent, is a new entrant in manufacture of covered conductors, only then would the requirements appended to the Note to clause 4 be required to be satisfied. As observed by us earlier, M/s.Havells India Ltd., was not rightly treated as a new entrant in the field of manufacture of covered conductors and hence the Note is not applicable to them.
13. The second reason is that, as pleaded by the 3 rd respondent in paragraph 6 of their counter affidavit, the 3 rd respondent had in any event, complied with the three sub clauses (a), (b) and (c) of clause 4 of the bidders requirement. The three requirements are (a) the make of the accessories suitable for the quoted covered conductor are to be furnished, (b) the covered conductor of minimum one metre length shall be submitted along with the bid, and (c) testing charges and arrangements for testing should be borne by the bidder when the sample is sent for testing in CPRI/EDA. These conditions are claimed by the 3rd respondent to be satisfied and there is nothing on record to prove that these conditions have not been satisfied. It can also be seen from the observation in Ext.P3 that, in the W.A. No.804/20 -:11:- technical evaluation, both bidders were found to be eligible. Thus, within the limited jurisdiction for judicial review of the award of contract, we are of the view that 3 rd respondent has satisfied the condition in clause 4 of the bidder requirement, in Ext.P2.
14. The next contention of the appellant is against the failure of the 3rd respondent to satisfy clause 5 of the bidder requirement. As per clause 5, type test reports of 11 KV covered conductor carried out in India as per EN 50397-1-2000 in labs like CPRI/EDA (within 5 years) are to be submitted along with the bid and those bids submitted without the type test report will be rejected. Admittedly both the appellant and the 3rd respondent had not submitted type test reports from CPRI/EDA since as is seen from Annexure R3(c) such a facility was not available in CPRI when the bids were submitted. As can be seen from Annexure R3(b), even the appellant had not submitted such a type test report from CPRI.
15. In this context, it is noted that the 3 rd respondent had submitted test reports from Rajasthan Test and Research Centre, while the appellant produced test reports from a laboratory in Europe. Clause 5 of the bidder requirement stands satisfied as W.A. No.804/20 -:12:- the type test report can be submitted from the other labs also, which is evident by the use of the word "like" in the said clause. It is also relevant to mention that subsequently, when CPRI established facilities for conducting the type tests, 3 rd respondent had obtained such reports, and the same was submitted to the 1st respondent and this was also considered in Ext.P3 minutes.
16. It is also seen that, strictly speaking, there is no relaxation of the conditions only for the 3 rd respondent. The relaxation has been granted to both bidders, as is evident from the exhibits produced. Appellant cannot have disagreement that the benefit of the relaxation was not granted to him. Whatever relaxation was granted on account of the COVID situation, the same was available to both bidders who were found eligible. We cannot also find fault with the attempt of respondents 1 and 2 in trying to prevent, what they believe, as cartel formation and creation of monopoly in the hands of few. More players in the fray only enures to the benefit of the establishment and the public good.
17. Since we find that respondents 1 and 2 have not acted arbitrarily and in the absence of any malafides, there is no scope for interfering with the award of contract in favour of the 3 rd respondent.
W.A. No.804/20 -:13:-
The appeal lacks merit and the same is accordingly dismissed.
Sd/-
S.V.BHATTI JUDGE Sd/-
BECHU KURIAN THOMAS JUDGE vps W.A. No.804/20 -:14:- APPENDIX PETITIONER'S/S EXHIBITS:
ANNEXURE A1 THE TRUE COPY OF THE MINUTES OF THE CIRCLE LEVEL PRE-QUALIFICATION COMMITTEE HELD ON 10/12/2018.
ANNEXURE A2 THE TRUE COPY OF THE MINUTES OF THE
CIRCLE LEVEL PRE-QUALIFICATION
COMMITTEE HELD ON 28/12/2018.
ANNEXURE A3 TRUE COPY OF THE BID QUESTIONNAIRE
ANSWERED BY THE THIRD RESPONDENT.
ANNEXURE A4 TRUE COPY OF LIST OF WORKS STATED AS
SIMILAR BY THE THIRD RESPONDENT.
ANNEXURE A5(a) TRUE COPY OF THE RELEVANT EXTRACTS OF
WORK ORDER NO. 7/DB1/148/18-19 DATED
04/06/2018 ISSUED BY THE KERALA STATE
ELECTRICITY BOARD TO THE THIRD
RESPONDENT.
ANNEXURE A5(b) TRUE COPY OF THE RELEVANT EXTRACTS OF
WORK ORDER NO.05/17-18/AEE/ESD-
PND/17.08.2017 ISSUED BY THE KERALA
STATE ELECTRICITY BOARD TO THE THIRD
RESPONDENT.
ANNEXURE A5(c) TRUE COPY OF THE RELEVANT EXTRACTS OF
LETTER OF AWARD (W.O. NO.20/2017-18
DATED 04/10/2017) ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(d) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO. DB.11/A-WO NO. 2/ET- 1/2017-18 DATED 06/03/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(e) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER OF AWARD (W.O. NO.21/2017-18 DATED 04/10/2017) ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.W.A. No.804/20 -:15:-
ANNEXURE A5(f) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER OF AWARD (W.O. NO.29/2017-18 DATED 21/12/2017) ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(g) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER OF AWARD (W.O. NO.31/2017-18 DATED 09/02/2018) ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(h) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO. 07/EE-ATL/2018-19/10-04- 2018 DATED 10/04/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(i) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER NO. DBE-31/18-19 DATED 07/09/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(j) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO.W.O. NO.4229/2017-18/35 DATED 31/02/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(k) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO. EDB-01/2018-19 DATED 18/04/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(l) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER OF ACCEPTANCE NO. DB39A/AEE- PTCD/17-18 DATED 12/03/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(m) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER OF AWARD NO. 16/DB 11/PDS/18-19 DATED 21/05/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD W.A. No.804/20 -:16:- RESPONDENT.
ANNEXURE A5(n) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO. DB/WO/1/2018-19 DATED 30/04/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(o) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO.08/2018-19 DATED 20/07/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(p) TRUE COPY OF THE RELEVANT EXTRACTS OF LETTER OF AWARD (W.O. NO.2/2018-19 DATED 10/07/2018) ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(q) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO.16/18-19 DATED 01/09/2018 DATED 17/10/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A5(r) TRUE COPY OF THE RELEVANT EXTRACTS OF WORK ORDER NO. 12/2018-19 DATED 17/10/2018 ISSUED BY THE KERALA STATE ELECTRICITY BOARD TO THE THIRD RESPONDENT.
ANNEXURE A6 TRUE COPY OF ORDER NO.AS NO.46/2014- 15/PBVR/T4/HT-Air VIEW/2016/5/8/14 DATED 01/08/2014 OF THE KSEB ANNEXURE A7 TRUE COPY OF TEST REPORT SUPPRESSED BY HAVELLS INDIA LIMITED IN RESPECT OF SUPPLY OF SPACED AERIAL CABLE ANNEXURE A8 TRUE COPY OF THE TECHNICAL SPECIFICATIONS FOR 11KV COVERED CONDUCTOR ISSUED ALONG WITH THE TENDER NOTIFICATION BY THE KSEB ANNEXURE A9 TRUE COPY OF THE GUARANTEED TECHNICAL PARTICULARS (GTP) SUBMITTED BY THE 3RD W.A. No.804/20 -:17:- RESPONDENT ALONG WITH HIS TENDER AS REQUIRED UNDER CLAUSE 4 OF THE TECHNICAL SPECIFICATIONS IN THE TENDER NOTIFICATION OF THE KSEB RESPONDENT'S/S' EXHIBITS:
ANNEXURE R3 TRUE COPY OF THE CERTIFICATE ISSUED BY M/S CESC LIMITED TO M/S HAVELLS INDIA LIMITED DATED 31.7.2019 ANNEXURE R3(a) TRUE COPY OF THE TECHNICAL FEASIBILITY REPORT OF THE EXECUTIVE ENGINEER, PROJECT MANAGEMENT UNIT, HARIPAD OF THE 1ST RESPONDENT DATED 7.6.2019 ANNEXURE R3(b) TRUE COPY OF LETTER ISSUED BY THE 2ND RESPONDENT TO THE APPELLANT DATED 19.9.2019 ANNEXURER R3(c) TRUE COPY OF LETTER ISSUED BY CENTRAL POWER RESEARCH INSTITUTE TO M/S RAYCHEM RPG (PRIVATE) LIMITED DATED 26.4.2018 ANNEXURE R3(d) TRUE COPY OF THE TEST REPORT ISSUED BY ASSOCIATION OF POLISH ELECTRICIANS, POLAND TO M/S RAYCHEM RPG (PRIVATE) LIMITED DATED 22.5.2018 ANNEXURE R3(e) TRUE COPY OF THE TEST REPORT ISSUED BY M/S GIG TESTING AND CALIBRATION LABORATORIES, POLAND TO M/S RAYCHEM RPG (PRIVATE) LIMITED DATED 18.5.2018 ANNEXURE R3(f) TRUE COPY OF THE TEST REPORT ISSUED BY CENTRAL POWER RESEARCH INSTITUTE TO M/S HAVELLS INDIA LIMITED DATED 4.7.2019 ANNEXURE R3(g) TRUE COPY OF THE TEST REPORT ISSUED BY RAJASTHAN TEST AND RESEARCH CENTRE TO M/S HAVELLS INDIA LIMITED 14.9.2019 ANNEXURE R3(h) TRUE COPY OF THE TEST REPORT OF SLIPPAGE TEST ISSUED BY CENTRAL POWER RESEARCH INSTITUTE TO M/S HAVELLS INDIA LIMITED DATED 19.11.2019 W.A. No.804/20 -:18:- ANNEXURE R3(i) TRUE COPY OF THE TEST REPORT OF CARBON BLACK CONTENT TEST ISSUED BY CENTRAL POWER RESEARCH INSTITUTE TO M/S HAVELLS INDIA LIMITED DATED 19.11.2019 ANNEXURE R3(j) TRUE COPY OF THE TEST REPORT OF TRACKING RESISTANCE TEST ISSUED BY CENTRAL POWER RESEARCH INSTITUTE TO M/S HAVELLS INDIA LIMITED DATED 18.12.2019 ANNEXURE R3(k) TRUE COPY OF THE EMAIL SENT BY THE 3RD RESPONDENT TO THE 2ND RESPONDENT DATED 23.3.2020