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The petitioner is an industrial unit engaged in manufacturing and supply of Precured Tread Rubber (PCTR), Bonding Gum (BG) and Vulcanising Cement/Solution (BVC) etc. The petitioner is supplying the above products to different State Road Transport Organisations within the country. The 1st respondent Corporation, being an instrumentality of the State Government, is following the procedure prescribed in the 'Purchase Manual for procurement of materials' for all purchases made. Provisions contained in the Kerala Transparency in Public Purchase Act, 2002 is applicable to the 1st respondent. One of the methods contemplated under the said Act is to purchase materials directly from suppliers who are rate contractors approved by the 'Association of State Road Transport Undertakings (ASRTU)', New Delhi. The 1st respondent Corporation is a member of ASRTU. The Corporation took decision to purchase PCTR, DG and BVC only from holders of approved rate contract from ASRTU,  belonging to southern states, with a condition that purchase will be made from the supplier whose "cost per kilo meter" is the lowest.

2. The petitioner as well as the 2nd respondent are rate contract holders with ASRTU for the period from 01.04.2011 to 31.03.2013. On the basis of a purchase order issued by the 1st respondent Corporation on 7.4.2011 (Ext.P5), the 2nd respondent was awarded supply of PCTR and BG for the period from 01.04.2011 to 31.03.2013. On 10.08.2011, by virtue of Ext.P7, the rate contract approval was granted to the 2nd respondent for BVC also. But on 15.10.2012 ASRTU issued Ext.P8 order deleting the item of BVC from the rate contract approved in respect of the 2nd respondent, on the basis that there was consecutive failure on three occasions in achieving required grade test report with respect to their product of BVC. As per Clause 19 of the terms and conditions of Ext.P1, the rate contract approval issued by the ASRTU for any item will be deleted from the contract on receipt of three consecutive C-Grade test reports and an item once deleted will be eligible for restoration only on receipt of two  consecutive A Grade Test reports. The petitioner alleges that despite Ext.P8 intimation issued by the ASRTU regarding deletion of the product of BVC supplied by the 2nd respondent from the rate contract approved, the 1st respondent Corporation took a decision on 07.03.2013 to purchase PCTR, DG and BVC from the 2nd respondent.

5. In the counter affidavit filed on behalf of the 1st respondent Corporation it is mentioned that ASRTU had issued fresh rate contract approval for the 2nd respondent for the period from 1.4.2013 to 31.3.2015, with respect to all the three products and the purchase order for retreading materials was issued only for meeting the requirements for the year 2013-14. Such a decision was taken by the Corporation after considering quotations of all the rate contract holders approved by ASRTU, including the petitioner and the 2nd respondent. A subsequent statement was filed by the Chief Law Officer of the 1st respondent Corporation mentioning that the 2nd respondent was considered for purchase after 15.10.2012 (after the date of Ext.P8) because they possessed valid ASRTU rate contract for PCTR and BG and that they were able to supply vulcanising solution also.  According to the 1st respondent, this was the accepted policy of the Corporation and hence there was no illegality or irregularity in placing purchase order for BVC at that time. Basis of the policy, as contended, is to consider ASRTU rate contract holders possessing valid rate contract for PCTR and BG also for the purpose of supply of BVC.

10. But as already observed, when the 1st respondent Corporation had taken a decision to place orders to the 2nd respondent on 7.3.2013, the product of BVC supplied by the 2nd respondent stood deleted from the rate contract approved by the  ASRTU, as revealed from Ext.P8, with effect from 15.10.2010. Contention of the 1st respondent that the 2nd respondent had submitted fresh contract for approval for the period from 1.4.2013 to 31.3.2013 cannot be taken as a ground to justify the order placed on 7.3.2013, which is evidently before submission of the new rate contract and approval of the same. Hence it is evident that at the time when order dated 7.3.2013 was placed for supply of BVC, the product of the 2nd respondent stood as not approved by the ASRTU. Contention raised by the 1st respondent based on the policy that when a supplier possessed valid ASRTU rate contract for PCTR and BG such supplier is given orders for supply of volcanising solutions also, in order to avoid disputes, cannot be accepted. It is to be noticed that the 1st respondent Corporation is an organisation of the Government to which provisions of the Kerala Transparency in Public Purchase Act 2002 is applicable. It is not in dispute that the 1st respondent is bound to purchase materials directly from suppliers who are rate contract holders approved by ASRTU. Eventhough the 1st respondent Corporation is referring to  deviations permitted by the State Government from provisions contained in the stock purchase manual, that by itself will not entitle the 1st respondent to purchase any item coming within the contract submitted by the rate contract holders for which the ASRTU approval does not remain valid. Hence this court is inclined to accept the contentions raised on behalf of the petitioners that the purchase order placed in favour of the 2nd respondent dated 7.3.2013 suffers from illegality and impropriety and the supply order placed was not in order.