IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 27TH MARCH 2009 / 6TH CHAITHRA 1931 WP(C).No. 1002 of 2009(T) ------------------------- PETITIONER(S): --------------- S.G. BIOMEDICALS NO. 3013,B, GOKULAM MAIN ROAD, OPP. TO RAMA MANDIRA, V.V. MOHALLA, MYSORE-2, REPRESENTED BY ITS PARTNER N. GOPAKUMAR, AGED 43 YEARSW, S/O. NARAYANA PILLAI. BY ADV. SRI.S.SUDHISH KUMAR RESPONDENT(S): --------------- 1. THE DISTRICT PROJECT OFFICER, SARVA SIKSHA ABHIYAN, CALTEX (TRAINING SCHOOL COMPOUND), KANNUR -1. 2. KELTRON RESISTORS LTD., KELTRON NAGAR, KALLIASSERY.P.O, KANNUR - 670 562, REPRESENTED BY ITS CHIEF EXECUTIVE. ADV. SRI.T.P.KELU NAMBIAR, SENIOR ADVOCATE FOR R2 SRI.M.GOPIKRISHNAN NAMBIAR FOR R2 GOVERNMENT PLEADER SRI. M.R. SREELATHA FOR R1 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX Ext.P1. True copy of the letter issued by the Ist respondent dated 31.10.2008. Ext.P2. True copy of the representation submitted by the petitioner to the Ist respondent dt. 6.11.2008. Ext.P3. True copy of the letter by the Ist respondent dated 26.11.2008. Ext.P4. True copy of the letter dated 26.11.2008 to the Petitioner. Ext.P5. True copy of the representation submitted by the petitioner along with the limited tender form. Ext.P6. True copy of the circular dated 23.4.2008. issued by the Prl. Secretary. Ext.P7. True copy of the enquiry letter by the 2nd respondent dated 24.5.2007. Ext.P8. True copy of the GO(p) No.448/05/ Fin dated 13.10.2005. Ext.P9. True copy f the circular dt. 13.8.2008 issued by the Central Govt. (clause %) Ext.P10. True copy of the relevant pages 68 to 87 of the Manual on Financial Management and procurement. // true copy // P.A to Judge. ANTONY DOMINIC,J. --------------------- W.P.(C).No.1002 OF 2009 ------------------------ Dated this the 27th day of March, 2009. JUDGMENT Petitioner seeks to quash Exts.P3 and P4 and to direct the first respondent to purchase goods from the petitioner as per Ext.P1 purchase order. 2. The facts of the case are that, by Ext.R1(b) dated 22.8.2008, the first respondent invited tenders for the supply of hearing aids. In pursuance to the said tender, petitioner, the 2nd respondent and certain others submitted tenders. From the counter affidavit it would appear that although in the tender notice, specification of the hearing aid not not given, tenderers had offered samples of their products and finally the product offered by the petitioner was accepted by the Purchase Committee, as they had also quoted the lowest tender. This was recommended in Ext.R1(c) also. WP(c).No.1002/09 2 3. Petitioner states that thereafter they were issued Ext.P1 purchase order dated 31.10.2008 for the supply of hearing aids at the rate as specified therein. The terms and conditions provided for the execution of an agreement as well, which does not appear to have been executed. According to the petitioner, on the basis of Ext.P1, they purchased necessary hearing aids for the supplying the same and they issued Ext.P2 dated 6.11.2008 to the 2nd respondent requesting to fix the date for supply of foods. While they were awaiting orders, they were issued Ext.P3 dated 26.11.2008, informing them that in view of the complaint that the 2nd respondent was not given a proper opportunity, it was unanimously decided to cancel the tender and accordingly Ext.P1 purchase order is also cancelled. 4. Subsequently, the petitioner received Ext.P4, issued by the Ist respondent, informing that in view of the cancellation of Ext.R1(b) tender, limited tender was decided to be received from the tenderers and that petitioner was also requested to submit their offer. On receipt of Ext.P4, petitioner filed Ext.P5 objections disputing the competence of the first respondent to WP(c).No.1002/09 3 cancel Ext.R1(b) tender and also contended that limited tenders could not have been invited in the circumstances. Petitioner submits that despite all this, ignoring his objections, limited tenders were received, processed and finally purchase order was issued to the 2nd respondent. It is in these circumstances the writ petition has been filed. 5. The first respondent has filed a detailed counter affidavit. In the counter affidavit it has been stated that the tenders, both open and limited, were for the academic year 2008-09 and if not finalised the grant will lapse on 31.3.2009. It is stated that in response to Ext.R1(d) various offers were received. However, in view of the fact that specifications of the hearing aid were not indicated in the tender notice, hearing aids of various brands, specifications and prices, were produced by the suppliers and that, of the commodities offered, the one offered by the petitioner was provisionally accepted. It is also their case that the rate offered by the petitioner was also lowest. Subsequently, the Chairman of the Purchase Committee received a complaint from the 2nd respondent, where they were expressed their WP(c).No.1002/09 4 willingness to supply the very same goods at a lesser rate. 6. Subsequently also, they got another compliant from the 2nd respondent in this behalf. Accordingly, the Purchase Committee held a meeting on 29.11.2008 and discussed the matter in detail and felt that the objection raised by the 2nd respondent deserves to be appreciated as otherwise huge loss will be caused to the ex-chequer. Ext.R1(d) is the purchase orders that was issued, which shows that the total price offered by the petitioner is Rs.26,59,630/-, while the total value of the purchase order issued to the 2nd respondent is Rs.20,15,610/-. It is stated that in view of the vast difference in the price quoted, it was decided to cancel Ext.P1 to avoid huge loss. Accordingly limited tenders were invited. It s stated that only the 2nd respondent submitted a limited tender and it was accordingly that the same was accepted. Therefore the contention raised in the counter affidavit is that there is substantial saving by resorting to the above procedure and that the work order was finalized in favour of the 2nd respondent only after giving an opportunity to all tenderes including the petitioner to make their revised offers. WP(c).No.1002/09 5 7. The contentions raised by the petitioner are mainly two fold. One is that the tender could not have been cancelled and the other is that in terms of the provisions contained in the Store Purchase Manual, Ext.P10 limited tender could not have been invited. 8. In so far as the plea that the tender could not have been cancelled is concerned, the argument raised is that following Ext.P1, the work order that was issued to the petitioner, a contract was entered into and once a contract is concluded between the parties it is not open to one parties of the to the contract to unilaterally cancel the same. In so far as this plea of counsel for the petitioner is concerned, having gone thorough the writ petition, I do not find a pleading to the effect that the contract was concluded following Ext.P1. In the counter affidavit also there is nothing to suggest that the contract is concluded. Therefore the contention raised is not supported by pleadings. Normally when tenders are invited, it is always open to the awarder to review his decision even if the work order is issued, if there are circumstances justifying the same and in the process, any loss WP(c).No.1002/09 6 is caused to any one, that is to be claimed before the civil court. In this case from the facts narrated above, it is evident that, on accepting the offer made by the 2nd respondent, public exchequer could save more than 6 lakhs. Therefore I am not prepared to accept the contention that the respondents were not competent to cancel Ext.R1(b) tender. 9. In so far as the limited tender, that is invited is concerned, the validity or otherwise of the limited tender that was invited by the first respondent in this case has to be appreciated in the facts which lead to the issuance of the same. As already noticed, Ext.R1(b) tender was cancelled on receipt of the complaint from the 2nd respondent, when the authorities realised that if a fresh tender was invited there will be substantial saving to the public exchequer. The provisions contained in the Store Purchase Manual, which provides that Limited Tender can be invited for transactions having maximum value of Rs.20,000/- cannot be applied to the facts of this case. 10. On the whole I am satisfied that by the aforesaid process, the State gained more than 6 lakhs. The question is WP(c).No.1002/09 7 whether in such a case, this court should, exercise its discretionary power under Article 226 of the Constitution of India. In my view, a case justifying interference on the grounds of public interest has been made out by the petitioner, and at best what can be said is that the petitioner has made out a legal point. The Apex Court in the judgment in Air India Ltd. V. Cochin International Airporat Ltd.(2000(2) SCC 617) held that interference with a tender is justified only if public interest justifies the same and not on the making of a legal point. Applying the aforesaid dictum, I am not inclined to accept the contentions raised this writ petition. The writ petition deserves to be dismissed and I do so. (ANTONY DOMINIC) JUDGE vi/ WP(c).No.1002/09 8 WP(c).No.1002/09 9