IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC TUESDAY, THE 1ST DECEMBER 2009 / 10TH AGRAHAYANA 1931 WP(C).No. 21443 of 2009(A) -------------------------------------- PETITIONER: ------------------- E.K.HAMSA, GOVT.CONTRACTOR, EDAKANDY HOUSE, MAVOOR P.O., KOZHIKODE DISTRICT PIN – 673661. BY ADVS. MR.BABU JOSEPH KURUVATHAZHA, MR.N.SHAMSUL HUDA. RESPONDENTS: ------------------------ 1. STATE OF KERALA, REP.BY ITS SECRETARY TO GOVERNMENT, DEPT.OF PUBLIC WORKS, GOVT. SECRETARIAT, THIRUVANANTHAPURAM. 2. ROADS & BRIDGES DEVELOPMENT CORPORATION OF KERALA LTD., 2ND FLOOR, PRIVI BUILDINGS, M.V.ROAD, PALARIVATTOM, KOZHI - 25, REP.BY ITS MANAGING DIRECTOR. 3. BABURAJAN V.K. CONTRACTOR, VANUPARAMBIL HOUSE, ULLICKAL P.O. KANNUR DISTRICT. R1 BY GOVT. PLEADER MR. DILEEP MOHAN, R2 BY MR. M. VIJAYAKUMAR, S.C, R3 BY ADV. MR.GEORGE POONTHOTTAM. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29/09/2009,ALONG WITH W.P.(C). NO. 22631 OF 2009,THE COURT ON 01/12/2009 DELIVERED THE FOLLOWING: W.P.(C). NO.21443/2009-A: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE BID NOTICE NO.RBDCK/UF/05/2009 DTD. 13/07/2009 PUBLISHED BY THE R.2. IN ENGLISH. EXT.P.2: COPY OF THE OBJECTION DTD. 25/07/2009 FILED BY THE PETITIONER BEFORE THE R.2. EXT.P.3: COPY OF THE TENDER NOTIFICATION NO.W.1.D.1.14.04 DTD. 26/05/2007 PUBLISHED BY THE SUPERINTENDING ENGINEER, P.W.D. NATIONAL HIGHWAY, KOCHI ON BEHALF OF THE R.1. IN THE MATHRUBHUMI DAILY DTD. 12/06/2007. EXT.P.4: COPY OF THE NOTIFICATION NO.W.1.D.1.14/04 DTD. 24/02/2009 PUBLISHED BY THE SUPERINTENDING ENGINEER, P.W.D. NATIONAL HIGH WAY, KOCHI ON BEHALF OF THE R.1. IN THE MADHYAMAM DAILY DTD. 05/03/2009. EXT.P.5: COPY OF THE REPRESENTATION DTD. 25/07/2009 SUBMITTED BY THE PETITIONER BEFORE THE R.2. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE. Prv. ANTONY DOMINIC, J. ------------------------------------------------------- W.P.(C) NO.21443/09(A) & 22631/09(Y) -------------------------------------------------------- Dated this the Ist day of December, 2009 J U D G M E N T The issue raised in these writ petitions being common, the cases were heard together and are disposed of by this judgment. 2. M/s. Road and Bridges Development Corporation of Kerala Limited (hereinafter referred to as ‘Corporation’ for short), published Ext.P1 in these cases, a notice inviting bids for collection of user fee on contract basis from the Road Over Bridge at Muzhippilangad, Kannur for the period from 01.08.2009 to 31.07.2010. The main conditions specified in the notice inviting bids are the following: (1) Contractors should have sound financial capability with experience of collecting user fee/ toll from bridges under the Public Works Department for 3 years within a period of preceding 5 years. (2) Tender documents will be issued only to those who produce the certificate of experience from an officer not below the rank of Executive Engineer. (3) Preference will be given to those who have experience in collecting toll/ user fee in Kannur District provided they are WPC .Nos.21443/09& anor. :2 : willing to take up the work at a rate above the highest bid obtained. (4) Last date for bid submission was at 4.00 p.m. on 25.07.2009 and bids were to be opened at 4.30 p.m. on the same day. 3. The petitioners in these two writ petitions produced experience certificates, they were issued tender documents and submitted their bids. In so far as the petitioner in W.P.(C) No. 22631/2009 is concerned, though he claims to have submitted Exts.P2 to P4 experience certificates, according to the 2nd respondent, Ext.P4 certificate was received by fax only on 27.07.2009. The petitioner in W.P.(C) No.21443/2009 produced certificate of experience of having collected toll in Kozhikode District and his eligibility is not disputed by the respondents. As scheduled in the tender notice, the bids received were opened on 25.07.2009 at 4.30 p.m. and the amounts quoted, in so far as it is relevant, are as follows: (1) Petitioner in W.P.(C) No.22631/2009 - Rs.1,03,32,000.00 (2)Petitioner in W.P.(C) No.21443/2009 - Rs.1,01,05,555.00 (3) Sri.Baburajan V.K. (4th Respondent in W.P.(C)No.22631/09 & 3rd respondent in W.P.(C) No. 21443/09) - Rs. 95,00,000.00 WPC .Nos.21443/09& anor. :3 : 4. It is stated that although the bids submitted by Sri.Baburajan was the lowest, a revised offer submitted by him on 27.07.2009 was accepted by Ext.P8 in W.P.(C) No.22631/2009 and thereafter, Ext.P9, was issued on 31.07.2009 by which the Corporation directed Sri.Baburajan to take over the user fee collection from 01.08.2009. 5. In so far as the petitioner in W.P.(C) No.21443/2009 is concerned, he submits that on 25.07.2009 itself he submitted a representation (Ext.P2), requesting to delete the clause incorporated in the tender notice providing for preference and that although on receipt of the said representation, Corporation had promised to consider the same, the tender was awarded to Sri.Baburajan giving him the benefit of the objectionable clause. It is in the aforesaid circumstances, these writ petitions have been filed seeking to challenge the clause in the tender notice providing for preference to tenderers having experience of toll collection in Kannur District. They also prayed that their tenders may be directed to be accepted and to award the tender to them. WPC .Nos.21443/09& anor. :4 : 6. The Corporation has filed counter affidavits in these cases. At the outset itself, it is to be mentioned that though the clause in the tender notice providing for preference is under challenge, there is no explanation forthcoming from the Corporation, why such a clause was incorporated or what is the object that is sought to be achieved. Sri.Baburajan, the successful tenderer, in his counter affidavit, has attempted to explain why the said clause was incorporated in the tender notice. But, however, having regard to the fact that an explanation in this respect ought to have come from the Corporation, which has not chosen to do so, I am not inclined to give much credibility to the explanation offered by the tenderer. 7. In so far as W.P.(C) No. 22631/2009 is concerned, the Corporation would submit that the petitioner had produced Exts.P2 and P3 certificates along with his tender. According to them, Ext.P2 certificate is issued by the Executive Engineer, Pazhassi Irrigation Project Division No.2, Kannur of having awarded toll collection for the period from 01.08.2006 to 31.07.2009. It is stated that the tender condition required experience for 3 years within a period of preceding 5 years of collection of tolls from WPC .Nos.21443/09& anor. :5 : bridges under the Public Works Department and that Ext.P2 certificate issued by the Irrigation Department did not satisfy the tender condition. In so far as Ext.P3 certificate is concerned, it is stated that this certified collection of toll from the bridges mentioned therein, during the period 2007-2008 and that therefore, this certificate was not sufficient to satisfy the three year experience prescribed in the tender notice. It is stated that therefore the petitioner was an ineligible tenderer and hence, he cannot have any grievance regarding the award of the tender. In so far as Ext.P4 experience certificate is concerned, it is stated that the said certificate was received from the petitioner by fax only on 27.07.2009, whereas the last date for submission of tenders and its opening, was 25.07.2009. 8. In so far as the award of tender to Sri.Baburajan is concerned, it is stated that it was fully in compliance with the tender conditions. Further, according to the Corporation the notification was published on 14.07.2009 and the last date for submission of bids was 25.07.2009. Petitioner knew the conditions specified, was conscious of the implications of the conditions, participated in the WPC .Nos.21443/09& anor. :6 : tender process without any objection and has chosen to raise objection, only after realising the fact that he lost in the tender process. According to the Corporation due to his aforesaid conduct, petitioner is estopped from challenging the tender conditions. 9. In its counter affidavit in W.P.(C) No.21443 of 2009, similar contentions have been raised by the Corporation. Answering the plea of the petitioner that on 25.07.2009 he submitted Ext.P2 representation requesting to delete the preferential clause, it is stated that Ext.P2 representation was not received by the Corporation. It is also stated that they had not given any promise to re-examine the clause providing for preference. This averment in the counter affidavit is not rebuted by the petitioner either by a reply affidavit or by producing any material. 10. In his counter affidavits Sri.Baburajan has stated that he had produced certificates entitling him for the benefit of the preferential clause incorporated in the tender notice. According to him the petitioner in W.P.(C) No.22631 of 2009 did not satisfy the experience specified in the tender notice and that though the petitioner in W.P.(C) No.21443 of 2009, was an eligible tenderer, WPC .Nos.21443/09& anor. :7 : since he alone was eligible for the benefit of preference, he was allowed to revise his offer and accordingly he offered Rs.1.05 crores, which was accepted and that by Ext.R4(b), he was asked to furnish security deposit and to execute agreement by paying the first instalment of Rs.4,46,513/-. It is stated that thereafter he furnished Ext.R4(c) bank guarantee and remitted Rs.4,46,513/- , on the basis of which, he was issued Ext.P9 referred to above directing him to take over the user fee collection from 01.08.2009. He also says that he has executed necessary agreement with the Corporation. 11. The main contention raised in these writ petitions is regarding the validity of the clause providing for preference, which reads as under: “Preference will be given to those who have experience in collecting toll / user fee in Kannur District provided they are willing to take up the work at a rate above the highest bid obtained”. Sri.M.K. Damodaran, Learned Senior Counsel appearing for the petitioner in W.P.(C) No.22631 of 2009, contended that this provision is against Articles 14, 16 and 19 (1)(g) of the Constitution WPC .Nos.21443/09& anor. :8 : of India. He placed reliance on the Apex Court judgment in Kailash Chand Sharma etc., etc., v. State of Rajasthan and Others (AIR 2002 SC 2877) where it has been held that residence by itself – be it within a State, region, district or a lesser area within a district, cannot be a ground to accord preferential treatment or reservation, save as provided in Article 16(3) and that it is not possible to compartmentalize the State into Districts with a view to offer employment to the residents of that district on a preferential basis. Learned Counsel also placed reliance on the Apex Court judgments in Mahabir Auto Stores and Others v. Indian Oil Corporation and Others (1990 (3) SCC 752), Reliance Energy Ltd., and another v. Maharashtra State Road Development Corpn. Ltd., and Others (2007 (8) SCC 1) and of this court in M/s. Zoom Developers Pvt. Ltd., v. State of Kerala and Others (2008 (4) KHC 934), which all lays down the requirement of fairness and transparency in state actions including invitation of tenders. On the other hand learned counsel appearing for the respondents contradicted the arguments of the petitioners and prayed, for the dismissal of the writ petitions. WPC .Nos.21443/09& anor. :9 : 12. Though Article 16 prohibits discrimination on the ground of residence, in my view the preference provided in the tender notice is not on the basis of the residence of the tenderer in any particular place. On the contrary it only provides that those who have gained experience in Kannur District are eligible for preference provided they are willing to offer amount higher than the highest bid. Therefore, residence of the tenderer does not have any relevance and for that reason, the argument relying on Article 16 of the Constitution is only to be rejected. 13. It was then contended that the preference provided is violative of Articles 14 and 19(1)(g) of the Constitution of India. First of all, it has to be borne in mind that the tender condition only provides for “preference”. This means that other things being generally qualitatively and quantitatively equal, though not with mathematical accuracy, a tenderer having acquired experience in Kannur District, will have an advantage over another tenderer having experience from elsewhere. Therefore, the preference provided cannot be construed as one denying opportunity to any of the tenderers to compete nor does it confer any right on anyone having WPC .Nos.21443/09& anor. :10 : experience from Kannur District to be considered for award of tender, to the exclusion of the other tenderers. In that view of the matter, it cannot be said that, the clause providing preference is discriminatory or that anyone’s right to carry on trade has been impaired. 14. The validity of Sec.47 (1-H) of the Motor Vehicles Act 1939 which provided that notwithstanding anything contained in the section, an application for stage carriage permit by a State Transport Undertaking for operating any inter-state road shall be given preference over all other applications, was challenged and was upheld by the Andhra Pradesh High Court. The Appeal filed against the Judgment was dismissed by the Apex Court in its judgment in Sher Singh v. Union of India (1984 (1) SCC 107) where it has been held as follows: “Does preference of this nature deny equality guaranteed by Article 14? The expression ‘preference’ amongst other means prior right, advantage, precedence etc. But how would it be possible to give precedence one over the other. It signifies that other things being equal, one will have preference over the others. When an application for a stage carriage permit is being processed as required by Section 47, the application of the Undertaking for an inter-State route shall be examined as application of any other private operator. Their merits and demerits must be WPC .Nos.21443/09& anor. :11 : ascertained keeping in view the requirements of (a) to (f) of Section 47(1) and after comparing the merits and demerits of both, not with the yardstick of mathematical accuracy, but other things being equal, the application of the Undertaking will have preference over others. Qualitative and quantitative comparison on broad features of passenger transport facility such as fleet, facilities to travelling public and other relevant consideration may be undertaken and after balancing these factors other things being equal, the application of the Undertaking shall be given preference over other applicants. There is no question of eliminating private operators merely because the Undertaking applies for a stage carriage permit under Chapter IV. That situation is catered to under Chapter IV- A. In an application under Chapter IV, Corporation has to enter the area like any other applicant, face the competition and come up to the level of other private operators intending to obtain state carriage permits and then in respect of the route in question claim preference. Would this statutory provision violate equality guaranteed by Article 14? The answer is obviously in the negative”. Dealing with argument relying on Article 19(1)(g) of the Constitution of India, it has been held that; The next contention was that Section 47 (1-H) is violative of Article 19(1)(g) in that it denies to the petitioner the fundamental freedom to carry on trade. There is no substance in this contention because the petitioner has not been denied his freedom to carry on trade. The petitioner is entitled to make an application under Chapter IV for a stage carriage permit and must compete with other private operators as also the Undertaking. It is too late in the day to contend that a preference in favour of the Undertaking would be violative of Article 19(1)(g) for the obvious reason that Undertaking like all other applicants for permit has to compete for a WPC .Nos.21443/09& anor. :12 : permit.” The law laid down by the Apex Court in the aforesaid judgment is a complete answer to the contention raised by the petitioners. In my view, there is absolutely no substance in the contention that the tender condition is hit by any of the provisions of the Constitution. 15. It was contended that Sri. Baburajan having quoted the lowest amount of Rs.95 lakhs, his bid was not equal to that made by the other tenderers and for that reason his tender could not have been considered. True the tender submitted by the person claiming preference should be equal in all respects with that of others. The equality required is not one of mathematical precision. A reading of the tender condition shows that a person eligible for the benefit of preference will be awarded the tender only if he is willing to offer a rate higher than the highest bid obtained. Therefore, necessarily, the beneficiary of preference is entitled to make a revised offer, which should be higher than the highest bid. In such a situation, it is not necessary or reasonable to expect that the offer made by the beneficiary of the preferential clause should be exactly equal to the highest bid obtained. In my view a reasonable interpretation of the WPC .Nos.21443/09& anor. :13 : tender condition only requires that the person claiming the benefit of preference, should satisfy the eligibility conditions, and should have made a valid offer. If he satisfies these two conditions, he is entitled to revise his bid and if the revised bid is higher than the highest bid obtained, he is entitled to be awarded the tender. In this case, admittedly, Sri. Baburajan satisfied the eligibility conditions, had made a valid offer and had produced documents substantiating his claim for preference. It was therefore he was allowed to revise his bid after the tenders were opened on 25.07.2009. This is perfectly in terms of the tender conditions and there is absolutely no substance in the contention that the offer made is vitiated for any reason. 16. I shall now deal with the contention of the respondents that the petitioner in W.P.(C) NO. 22631 of 2009, did not satisfy the tender condition prescribing experience and therefore is not entitled to any relief in the writ petition. As already noticed the tender conditions specified experience of collecting user fee / toll from bridges under the Public Works Department for three years within a period of preceding five years. According to the respondents the WPC .Nos.21443/09& anor. :14 : certificates produced by the petitioner in W.P.(C) NO. 22631 of 2009 are Exts.P2 and P3. Ext.P2 is a certificate issued by the Executive Engineer, Pazhassi Irrigation Project Dn . No.II, Kannur certifying that the petitioner was awarded toll collection for the period from 01.08.2006 to 31.07.2009 at Parassinikkadavu Aqueduct-cum- Road Bridge at Parassinikkadavu. As rightly contended by the respondents, this document shows that the bridge mentioned therein is that of Irrigation Department and not that of Public Works Department, in which event alone, the petitioner could have claimed the benefit of experience. Ext.P3 certificate issued by the Executive Engineer, PWD Roads Division, Kannur certify that the petitioner has undertaken the collection of toll in respect of the 4 bridges mentioned therein during the year 2007-08. This document therefore certifies the petitioner’s experience only for one year. As far as Ext.P4 certificate is concerned, it is the case of the Corporation that it was received only on 27.07.2009. This contention is not refuted by the petitioner in any manner. Even if it is assumed that Ext.P4 was received in time, there again, the experience certified is only for the period 01.04.2006 to WPC .Nos.21443/09& anor. :15 : 31.03.2007. 17. Learned Counsel for the petitioner argued that Ext.P1 had made it clear that tender document will be issued only to those who produced experience certificate and that since tender document was issued accepting the certificates produced, his eligibility cannot be disputed. Though the tender condition is as stated by the counsel, from the certificates produced by the petitioner itself, it is evident that he was ineligible. Therefore, the fact the tender document was wrongly issued, by itself, will not render the petitioner eligible. From the above, it is evident that the petitioner did not satisfy the prescribed three years experience to be eligible for award of tender in pursuance to Ext.P1. In such circumstances, the stand of the respondents that the petitioner did not satisfy the tender conditions and was ineligible, deserves to be upheld and this writ petition is to be dismissed on that ground itself. 18. In so far as the petitioner in W.P.(C) NO. 21443 of 2009 is concerned, there is no dispute about his eligibility to be considered for award of tender. He had quoted Rs.1,01,05,555/- as against Sri. Baburajan.V.K, who had quoted only Rs.95 lakhs. His grievance WPC .Nos.21443/09& anor. :16 : is that it was because of the tender condition providing for preference that Sri.Baburajan was allowed to revise the bid and awarded the contract. I have already upheld the validity of the tender condition. Sri. Baburajan, who was eligible for preference, was entitled to be awarded the tender, provided he was willing to take the work at a rate above the highest bid obtained. It is on record that Sri. Baburajan revised his bid to Rs.1.05 crores and it was on that basis, the tender was awarded to him. Having upheld the tender conditions providing for preference, I cannot find anything objectionable in allowing Sri. Baburajan to revise his bid, in terms of the tender conditions and awarding tender to him. For these reasons, this writ petition is also devoid of any merit. 19. I also find merit in the contention that the petitioners have submitted their bids fully knowing the implication of the conditions incorporated in Ext.P1. At no point of time, prior to the filing of these writ petitions, have they raised any objections against the condition providing preference to those having experience from Kannur District and writ petitions were filed, after realising that they lost in the tender process. By their aforesaid conduct, they having WPC .Nos.21443/09& anor. :17 : acquiesced to the tender conditions, and therefore they are estopped from challenging the tender conditions. 20. In fact, relying on the Apex Court judgments in Tata Cellular vs. Union of India (1994 (6) SCC 651) and Air India Ltd. V. Cochin International Airport Ltd., and Others (AIR 2000 SC 801) though it was contended on behalf of the respondents that the preference being a tender condition, since the Corporation had the freedom to fix its own terms of invitation to tender, the said tender condition is not open to judicial scrutiny, that in the absence of any public interest the writ petitions are to be dismissed, I do not think, in the circumstances of this case, I need deal with these contentions. In the circumstances, I do not find merit in the contentions raised. The writ petitions are only to be dismissed and I do so. No costs. (ANTONY DOMINIC) JUDGE vi/