Kerala High Court
M/S. Anchor Structurals vs The Kerala State Electricity Board ... on 20 June, 2017
Author: K.Vinod Chandran
Bench: K.Vinod Chandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
MONDAY, THE 20TH DAY OF NOVEMBER 2017/29TH KARTHIKA, 1939
W.P(C).No.35558 of 2017 (T)
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PETITIONER(S):-
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M/S. ANCHOR STRUCTURALS,
ENGINEERS & CONTRACTORS, ELOOR HOUSE, KOLENCHERRY P.O.,
ERNAKULAM-682311,
REPRESENTED BY ITS MANAGING PARTNER,
DR.SASI ELOOR.
BY ADVS.SRI.K.L.VARGHESE (SR.)
SMT.SANTHA VARGHESE
SRI.RANJITH VARGHESE
SRI.RAHUL VARGHESE
RESPONDENT(S):-
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1. THE KERALA STATE ELECTRICITY BOARD LIMITED,
VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695004,
REPRESENTED BY THE SECRETARY.
2. THE CHIEF ENGINEER (SCM),
KERALA STATE ELECTRICITY BOARD LIMITED,
VYDYUTHI BHAVANAM, PATTOM, THIRUVANANTHAPURAM-695004.
3. M/S.GAUTHAM CEMENT WORKS,
NO.9 & 10, SURANA HOUSE, SIVANANDANAM COLONY,
KORATTUR, CHENNAI-600080.
4. M/S.JYOTHI CONSTRUCTION CO.,
JYOTHI BUILDING, MAIDAN ROAD, MANGALORE-575001.
R1 & R2 BY ADV. SRI.RAJU JOSEPH (SR.)
R1 & R2 BY STANDING COUNSEL SRI.GEORGEKUTTY MATHEW
R3 BY ADV. SRI.SANTHOSH MATHEW
R3 BY ADV. SRI.ARUN THOMAS
R3 BY ADV. SRI.JENNIS STEPHEN
R3 BY ADV. SRI.VIJAY V. PAUL
R3 BY ADV. SMT.KARTHIKA MARIA
R3 BY ADV. SMT.MARIA ROY
R3 BY ADV. SMT.VEENA RAVEENDRAN
R4 BY ADV. SRI.K.JAJU BABU (SR.)
R4 BY ADV. SMT.M.U.VIJAYALAKSHMI
BY SRI.P.A.AHAMED, SC, KSEB LIMITED.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
16-11-2017 ALONG WITH W.P.(C) NO.35673 OF 2017-H, THE COURT ON
20-11-2017 DELIVERED THE FOLLOWING:-
W.P(C).No.35558 of 2017 (T)
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APPENDIX
PETITIONER(S)' EXHIBITS:-
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EXHIBIT P1 TRUE COPY OF THE TENDER SUMMARY REPORT DT.20-06-2017
ON OPENING THE BIDS AS AVAILABLE FROM THE WEBSITE DETAILS.
EXHIBIT P2 TRUE COPY OF THE PRE-QUALIFICATION BID INCLUDING CONTENTS
OF THE DOCUMENTS, NOTE TO THE BIDDERS, NAME OF ELECTRICAL
CIRCLES ETC.
EXHIBIT P3 TRUE COPY OF THE RELEVANT CLAUSES IN THE GENERAL TENDER
TERMS & CONDITIONS FOR E-PROCUREMENT INCLUDING OPENING OF
TECHNICAL BID AND BIDDER SHORT-LISTING AS ALSO CAUTION FOR
NEFT MODER OF PAYMENT OPTION AS ALSO ONLINE PAYMENT OF
RTGS MODE ETC.
EXHIBIT P4 TRUE COPY OF THE TERMS & CONDITIONS UNDER SECTION-B OF THE
BID DOCUMENT REFERRING TO EMD SCRUTINY, (COVER-I) AND
CLAUSE B1.021 ETC.
EXHIBIT P5 TRUE COPY OF LETTER DT.27-10-2017 ISSUED BY THE
2ND RESPONDENT TO THE PETITIONER.
EXHIBIT P6 TRUE COPY OF THE REPRESENTATION DT.30-10-2017 SUBMITTED BY
THE PETITIONER TO THE 2ND RESPONDENT.
RESPONDENT(S)' EXHIBITS:-
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EXHIBIT R1(a) TRUE COPY OF THE BID OPENING SUMMARY DATED 20.06.2017
AT 2.47 PM.
EXHIBIT R1(b) TRUE COPY OF THE E-MAIL DATED 20.06.2017 AT 7.05 PM.
SENT FROM SBI LOCAL HEAD OFFICE, TRIVANDRUM TO KERALA
STATE IT MISSION.
EXHIBIT R1(c) A TRUE COPOY OF THE E-MAIL SENT BY KERALA STATE
IT MISSION TO KSEB DATED 22.06.2017.
EXHIBIT R1(d) TRUE COPY OF THE E-MAIL SENT BY E-PROCUREMENT
HELPDESK TO KSEB DATED 03.07.2017.
EXHIBIT R1(e) TRUE COPY OF THE CORRIGENDUM NO.1 PUBLISHED BY
KSEB DATED 06.07.2017.
EXHIBIT R1(f) TRUE COPY OF THE BID OPENING SUMMARY PUBLISHED
ON 07.07.2017 AT 12.06 PM.
W.P(C).No.35558 of 2017 (T) - 2 -
EXHIBIT R3(1) TRUE COPY OF THE RELEVANT PAGE OF THE ACCOUNTS
STATEMENT OF BANK ACCOUNT NO.A/C.NO.08374015000123
MAINTAINED IN ORIENTAL BANK OF COMMERCE IN AJMER,
RAJASTHAN BY THE 3RD RESPONDENT EVIDENCING TRANSFER
OF RS.55,96,225/-.
EXHIBIT R3(2) TRUE COPY OF THE CERTIFICATE DATED 8.11.2017 ISSUED
BY THE BRANCH MANAGER OF ORIENTAL BANK OF COMMERCE,
CERTIFYING THE FACT THAT AN AMOUNT OF RS.55,96,225/-
HAS BEEN TRANSFERRED BY RTGS ON 15.6.2017.
EXHIBIT R3(3) TRUE COPY OF THE BID SUBMISSION CONFIRMATION DATED
17.6.2017 RECEIVED BY THE THIRD RESPONDENT.
EXHIBIT R3(4) TRUE COPY OF THE E-MAILS DATED 20TH AND 21ST JUNE 2017
SENT BETWEEN SBI RTGS TEAM AND ORIENTAL BANK OF
COMMERCE AND THE THIRD RESPONDENT.
EXHIBIT R3(5) TRUE COPY OF THE REPRESENTATION DATED 21.6.2017
SUBMITTED BY THE 3RD RESPONDENT TO THE SECOND
RESPONDENT.
EXHIBIT R3(6) TRUE COPY OF THE COMMUNICATION SENT BY THE SECOND
RESPONDENT ON 7.7.2017 TO THE THIRD RESPONDENT.
EXHIBIT R3(7) DETAILS OF THE RATES QUOTED BY ALL THE PARTIES.
EXHIBIT R3(8) TRUE COPY OF THE TENDER SUMMARY REPORT DT.10.11.2017.
EXHIBIT R4(a) TRUE COPY OF THE RTGS OUT TOWARD DETAILS DATED
15.06.2017 TOWARDS REMITTANCE OF EMD OF RS.5596225/-.
EXHIBIT R4(b) TRUE COPY OF THE CERTIFICATE OF THE KARNTAKA
BANK LTD., DATED 20.06.2017 TOWARDS THE
4TH RESPONDENT.
EXHIBIT R4(c) TRUE COPY OF THE LETTER NO.PC/SCM-POLES/17-18/NORTH
DATED 27.10.2017 ISSUED BY THE KSEB TO THE
4TH RESPONDENT.
Vku/- [ true copy ]
K. Vinod Chandran, J
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W.P.(C).Nos.35558 of 2017-T & 35673 of 2017-H
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Dated this the 20th day of November, 2017
JUDGMENT
Both the writ petitions challenge the award of a work for supply of 8 metre and 9 metre PSC poles for the various electrical circles in the North Malabar region for a period of two years. The notice inviting tender bears No.SCM/KSEB/eP.16/2017-18. The party respondents 3 and 4 were awarded the contract. The objection raised is of the Earnest Money Deposit [EMD] & Fees of both the said respondents having not been received in the time stipulated and their tenders having been rejected at the pre-qualification stage itself. A review is said to have been made to favour the rejected bidders, which is impugned herein.
2. The learned Senior Counsel appearing for the petitioner in W.P.(C) No.35558 of 2017 refers to Exhibit P1 to indicate that the tender submitted by the respondents 3 and 4 were rejected for reason of the fee having not been paid. The pre-qualification bid document at Exhibit P2 was specifically referred, to point out that the bidder/tenderer was advised to submit the bids well before the WP(C) Nos.35558/2017 & - 2 - 35673 of 2017 stipulated time to avoid delay for reason of any kind of network issues, traffic congestion, etc. It was specifically stipulated that the KSEB/awarder was not responsible for any kind of issues arising from a defect in the network. Exhibit P3 is the general terms and conditions for e-procurement, which speaks of a pre-qualification by opening the technical bids, which would first be evaluated and shortlisted as per the eligibility and technical qualifications. The fee payment was to be be through Real Time Gross Settlement [RTGS] or National Electronic Fund Transfer [NEFT]. The completion of the process of bid submission would be only on remittance through NEFT/RTGS; the latter of which had to be done at least 48 hours prior to the last date to avoid any payment issues as per the RTGS mode.
3. It was the responsibility of the bidder to ensure that the transaction has been made successfully; failing which the bid would not be evaluated. It is following the said stipulations in the bid document and the other terms and conditions, that Exhibit P1 was issued on 20.06.2017, the date stipulated for opening of tender and technical bid evaluation. The party respondents' bids were rejected and there were only 4 successful tenderers qualified in that stage. WP(C) Nos.35558/2017 & - 3 -
35673 of 2017 However, later, in the website the 3rd and 4th respondents were shown to be qualified and their price bid opened along with the other bidders on 28.10.2017. It is argued that the Hon'ble Supreme Court has consistently held that when there is an essential condition stipulated in the tender document, if the same has not been complied with the tender has to be rejected. Reliance is placed on Bakshi Security & Personnel Services (P) Ltd. v. Devkishan Computed (P) Ltd. [(2016) 8 SCC 446] to bring home the point that the conditions of tender are sacrosanct and any attempt at waiver would vitiate the award.
4. The learned Counsel appearing in W.P.(C) No.35673 of 2017 adopts the contentions of the learned Senior Counsel and emphasizes three aspects with respect to the challenge before this Court. The payment of the EMD and fees through RTGS/NEFT mode has to be received by the awarder and a mere attempt to pay does not amount to successful transaction. Internet issues or reconciliation defects of the Bank would not enable a rejected tender to be accepted. The next argument is that though a corrigendum is said to have been issued by the KSEB showing the disqualification of the WP(C) Nos.35558/2017 & - 4 - 35673 of 2017 tenderer, then there should have been a date stipulated for the re-opening especially when the other tenders were reopened on an earlier date. The further argument is that 2 tenders having been rejected initially, there can be no challenge made to that by the rejected bidders and in this case the KSEB on its own accord has challenged it and revised it.
5. The learned Counsel would rely on W.B.State Electricity Board v. Patel Engineering Co. [(2001) 2 SCC 451] to contend that a mistake is always unintentional and cannot be a ground for making corrections and additions in a tender already submitted, especially after the opening. It is not the look out of the awarder as to whether the defect was one attributable to the bidder or not. Kanhaiya Lal Agrawal v. Union of India [(2002) 6 SCC 315] held that any condition which, if not complied with, would result in rejection, is an essential condition and cannot be said to be a collateral term. Jagdish Mandal v. State of Orissa [(2007) 14 SCC 517] and Sorath Builders v. Shreejikrupa Buildcon Ltd. [(2009) 11 SCC 9] are cited to urge this Court not to look at the price difference, which has been held to be inconsequential. Central Coalfields Ltd. WP(C) Nos.35558/2017 & - 5 -
35673 of 2017 v. SLL SML (Joint Venture Consortium) [2016 (3) KLT 2060 (SC)] reiterated the well heeled proposition that when something is to be done in a particular manner, it should be done in that manner or not at all. Neither the awarder nor even this Court sitting in judicial review could upset the decision taken on pre-qualification, on the basis of the facts available at the time of opening of tenders. Subsequent events cannot lead to a review being carried out. Refuting the contention of the KSEB in its counter affidavit, the petitioner also refers to Exhibit P8, in which another tender by the KSEB itself was rejected for reason of receipt after the stipulated time. There was no reason for the KSEB to take a different approach in the present case, is the submission.
6. The learned Counsel for the KSEB specifically refers to paragraph 6 of their counter affidavit. The Kerala State Information Technology Mission (for short 'IT Mission' hereafter) was the agency authorized to control the e-procurement system. It is true that on 20.06.2017, the day stipulated, the tenders were opened and two were rejected after verifying the reconciliation statement of the Bank, which failed to disclose remittance of EMD & Fees. The IT Mission WP(C) Nos.35558/2017 & - 6 - 35673 of 2017 was informed on 20.06.2017 at 7.05 p.m. by the State Bank of India at Thiruvananthapuram, through an e-mail, that two successful transactions credited into their pooling account, was not updated to the e-procurement system due to some technical issue at their end. The e-mail is produced at Exhibit R1(b). The IT Mission had informed the same to the KSEB by e-mail, produced at Exhibit R1(c) on 22.06.2017 and was later confirmed as per Exhibit R1(d). On the basis of the same, a corrigendum was issued in the e-tender website on 06.07.2017 as per Exhibit R1(e). Consequently, a bid opening summary was published on 07.07.2017, which is marked as Exhibit R1(f).
7. It is submitted that the rates quoted by both the petitioners were far above the rates quoted by the respondents who were awarded the contract. It was not a question of reviewing the earlier order, but a bona fide mistake at their end was corrected; which otherwise would have been challenged. The agency entrusted with the e-procurement; had been informed of an omission at the hands of the Bank, which had been rectified and, hence, acted upon. The KSEB had only attempted to prevent a litigation in the matter, WP(C) Nos.35558/2017 & - 7 - 35673 of 2017 since the rejection was, on the face of it, found to be bad. The learned Senior Counsel appearing for the 3rd respondent and the learned Counsel appearing for the 4th respondent have taken me through the documents produced to show the exact mix up that occurred at the hands of the Bank. They also refer to the specific documents produced by them to show the remittance and receipt having been done and accepted before the stipulated date.
8. Pertinent is the fact that e-tenders are at a fledgling stage and there are many writ petitions filed for reason of the various mishaps caused due to the initial glitches occasioned in the net transactions. In this context, it has also to be noticed that the State Bank of India had just recently amalgamated Subsidiary Banks to itself and was beset with transaction issues through the internet. Relevant is the decision of this Court in W.P.(C) No.31904 of 2017 dated 06.11.2017. Therein, the petitioner had successfully remitted the EMD, through its Bank, and was also issued a UTR number. However, the same was not received by the awarder's Bank, which was the State Bank of India. The petitioner therein had put forth a judgment of a learned Single Judge of this Court, wherein on almost WP(C) Nos.35558/2017 & - 8 - 35673 of 2017 similar facts the tender was directed to be accepted. The awarder, however, relied on another judgment of myself, wherein the rejection of tender was upheld for reason of the default being attributable to the Bank of the bidder. The respective Banks of the bidder and the awarder were directed to be impleaded and the State Bank of India, the awarder's Bank categorically, on affidavit, stated that there were certain technical issues within the system which resulted in the amount not being credited to the designated account of the Government. This Court, following the first judgment of another learned Single Judge; in which also the fault was attributable to the receiving Bank, directed the tender to be accepted.
9. As to M/s.Gautham Cement Works, Exhibit R4(1) in the counter affidavit in W.P.(C) No.35673 of 2017 is their statement of account maintained with the Oriental Bank of Commerce, which shows an amount of Rs.55,96,225/- having been deducted in the account under an RTGS transaction to Kerala e-procurement. The bid submission confirmation is produced as Exhibit R4(3), which indicates a UTR No.ORBCH17166041150. This according to the said respondent shows the successful nature of the transaction which was WP(C) Nos.35558/2017 & - 9 - 35673 of 2017 effected on 15.06.2017. M/s.Jyothi Construction Co., produce Exhibit R3(1) along with the counter affidavit in W.P.(C) No.35558 of 2017, to show a similar amount having been transacted through RTGS with UTR No.KARBH17166590363 indicating the successful remittance. Reference is then made to Exhibit R1(b) produced by the KSEB. Therein, two transactions are seen on 15.06.2017. On the 3rd column is to be entered the RTGS number and at the 5th column the UTR number. By a mistake both the columns showed the very same number, which resulted in the mix up and the rejection of the tender. The e-mail at R1(b) is dated 20.06.2017 at 7.05 p.m. The IT Mission had, by Exhibit R1(c) informed the mix up at the receiving Banks end to the KSEB and after confirmation received by the e-procurement help desk, the Chief Engineer, SCM, KSEB issued Exhibit R1(e) corrigendum to the aforesaid tender. The bids of the other two persons were opened and a bid opening summary uploaded on the website at Exhibit R1(f).
10. Evidently a mistake in showing the receipt of remittance of the money by the Bank in its reconciliation statement was the cause of the rejection. There is no question of attribution of mistake WP(C) Nos.35558/2017 & - 10 - 35673 of 2017 on one or the other. The remittance received within the period was not shown in the statement of the Bank at the time of reopening of tenders on which ground the tenders were rejected and the rejection if challenged would have been definitely set aside. The rejection at Ext.P8 cannot at all be equated, since there the remittance was received after the stipulated date. Here there cannot be any dispute to the facts that the remittance was made well before the stipulated date and was received by the Bank on the same date.
11. Bakshi Security & Personnel Services (P) Ltd. dealt with an award of a labour contract; wherein the tender conditions stipulated that the quoted wages were to be fixed and not open ended. The requirement also was to comply with the labour welfare legislations and the notification of minimum wages issued by the Labor Department. The tenders were opened and then the opinion of the Labor Department was sought as to the total minimum wage figure for the contract. The appellant and one another had quoted below the figure fixed by the Labor Department. That other bidder was before the High Court, who found fault with the Government for not having apprised the bidders of the total figure, before submission WP(C) Nos.35558/2017 & - 11 - 35673 of 2017 of the bids and directed the Government to permit the bidders to revise their bills. The petitioner before the High Court stuck to their original quote and also offered to take up the work at the figure fixed by the Labor Department. Again the Government took the opinion of the Labor Department who revised the total figure applicable. The appellant had quoted above the revised figure and was awarded the contract. That other unsuccessful bidder was again before the High Court, alleging that the revised figure was tailor made for the appellant. The award was set aside directing the petitioner to give a clear undertaking as to their offer and a consequential direction to the Government to award the contract to the petitioner, if they bid the lowest and were otherwise qualified. The Hon'ble Supreme Court found that the tender conditions stipulated a fixed offer, specifically interdicting an open ended one. The unsuccessful bidder having not made a fixed offer his tender was liable to be rejected. Though it was held that there was an infirmity in the Government having not informed the revised figure to the bidders, reversing the judgment of the High Court, considering the delay, the award was confirmed. The rejection of the tender of the party respondents herein was not on WP(C) Nos.35558/2017 & - 12 - 35673 of 2017 violation of any condition as found in the afore cited decision. In fact the rejected bidders had complied with the conditions and only on a mix up at the receiving bank, that is the bank of the awarder that their tenders happened to be rejected at the first instance.
12. W.B.State EB was a case in which a clarification was sought from the lowest bidder, upon which the bidder sought to make some corrections in the quote on the ground of "systematic computer typographical failure" meaning the rates in certain columns having been inadvertently repeated by the computer. It was in this context that the Court held that all mistakes are unintentional and the correct test is to see whether by due vigilance it could have been avoided. The decision of the High Court which interfered with the letter seeking clarification was found to be a permissible exercise of judicial review. However the further directions permitting correction by the bidder was set aside. Here there is no mistake committed by the bidder and the mistake occurred at the hands of the receiving Bank. The party respondents had employed due diligence and had remitted the money in time. The receiving Bank failed to show the remittance in its reconciliation statement; which was not at all attributable to the WP(C) Nos.35558/2017 & - 13 - 35673 of 2017 bidder.
13. Kanhaiya Lal Agrawal was pressed into service to urge that the remittance of EMD & fees was an essential condition, the non-compliance of which would result in rejection. There is no doubt about that but it is clear from the records that the remittance was made and successfully received but did not appear in the statement of the receiving Bank. Jagdish Mandal and the following extract is more appropriate:
"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or WP(C) Nos.35558/2017 & - 14 - 35673 of 2017 final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.
14. The rejection of the tender of the party respondents was arbitrary in so far as there cannot be alleged any non-compliance of essential conditions. A challenge made would have necessarily permitted judicial review on that ground. The awarder rightly set right the mistake which occurred at its end and it cannot be said that they should have waited for a challenge by the respondents. There is hence nothing arbitrary, irrational or unreasonable in the action of the KSEB and there is no allegation of bias or mala fides. There is WP(C) Nos.35558/2017 & - 15 - 35673 of 2017 absolutely no ground for judicial review.
15. As to the price difference which was held to be of not much relevance in deciding the award, this Court has not looked at that aspect at all. In Jagdish Mandal in one of the items the quote of the lowest bidder was found to be so low as to make it unworkable. There is no such decision available here. Sorath Builders also refused to rule in favour of the lowest bidder when he had failed to submit the documents within time stipulated. Central Coalfields Ltd. upheld the decision to reject a tender, on the ground of the bank guarantee furnished being not in the form stipulated. There are no such grounds available here.
16. The decision to reject the tenders of the party respondents was only on account of the receiving Bank having not shown the receipt of money in its reconciliation statement. The receipt within the stipulated time was later confirmed. The tenders having been opened initially and then a corrigendum having been issued showing the pre-qualification of the two rejected; there was no necessity to again notify the opening. What remained to be done was the technical evaluation of the rejected tenders and then the opening WP(C) Nos.35558/2017 & - 16 - 35673 of 2017 of financial bids. There was no challenge to the rejection. The awarder on being informed of the remittance having been made in time, the rejection was found to be improper. The awarder, hence took up the tenders for pre-qualification which fact was also notified in the web site. The action was appropriate and no fault can be found. There is no ground for a judicial review. In the facts and circumstances afore stated and the law on the subject, this Court does not find any reason to interfere with the award of the work. The writ petitions would stand dismissed. Parties are left to suffer their respective costs.
Sd/-
K.Vinod Chandran Judge.
vku/-
[ true copy ]