IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID TUESDAY, THE 16TH AUGUST 2011 / 25TH SRAVANA 1933 WP(C).No. 11588 of 2011(W) ----------------------------------------- PETITIONER(S): ------------------------ MANOJ.E.J, EDASSERIPPARAMBU HOUSE, CHANGANACHERRY P.O., (FISH MARKET AREA), CHANGANACHERRY. BY ADV. SRI.M.P.MADHAVANKUTTY RESPONDENT(S): --------------------------- 1. CHANGANACHERRY MUNICIPALITY, REPRESENTED BY ITS SECRETARY, MUNICIPAL OFFICE, CHANGANACHERRY - 686 101. 2. SECRETARY, CHANGANACHERRY MUNICIPALITY, MUNICIPAL OFFICE, CHANGANACHERRY - 686 101. *ADDL.R3 IMPLEADED: R3. CHANGANACHERRY MERCHANTS ASSOCIATION, ALAN.J.MATHEW VYAPARA BHAVAN, MARKET ROAD, CHANGANACHERRY, REPRESENTED BY THE PRESIDENT, SAMSON MATHEW, S/O. V.D.MATHEW, AGED 43, VALYAPARAMBIL HOUSE, PUZHAVATHU, CHANGANACHERRY. (*ADDLR3 IS IMPLEADED AS PER ORDER DTD. 25/05/2011 IN I.A.NO.6936/2011) R1 & R2 BY ADVS.SRI.SIBY MATHEW, SRI.PHILIP J.VETTICKATTU. ADDL.R3 BY ADVS.SRI.C.S.MANILAL, SRI.S.NIDHEESH. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/08/2011, THE COURT ON 16/08/2011 DELIVERED THE FOLLOWING: Kss WPC.NO.11588/2011 W APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE RE-AUCTION NOTICE DTD. 18/02/2011. P2: COPY OF THE AGREEMENT DTD. 05/03/2011. P3: COPY OF THE RECEIPT ISSUED BY THE 2ND RESPONDENT. P4: COPY OF THE RECEIPT ISSUED TO THE PETITIONER. P5: COPY OF THE REPRESENTATION DTD. 04/04/2011. P6: COPY OF THE NOTICE DTD. 01/04/2011 ISSUED BY THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.A.TO JUDGE Kss HARUN-UL-RASHID, J. ------------------------ W.P.(C).No.11588 Of 2011 ---------------------- Dated this the 16th day of August, 2011. J U D G M E N T The writ petition is filed seeking to quash Ext.P6 and for a direction directing the respondents to permit the petitioner to collect toll fee from the fish market in Changanassery pursuant to Ext.P2 agreement. 2. The 1st respondent Municipality invited quotation for collecting fees for the Municipality from various places within the Municipal limits of Changanassery including collection of fees from the fish market for the year 2011-2012. The original auction was fixed on 18.2.2011. Since none of the bidders quoted more than Rs.1.5 Lakhs, the auction was not confirmed in favour of anyone. Thereafter, the Municipality invited fresh tenders as per Ext.P1. The date of re-auction was on 5.3.2011. The petitioner quoted an amount of Rs.1.10 Lakhs for the purpose of collecting fees from the fish market. Thereafter, the petitioner executed an agreement in favour of the 1st respondent on 5.3.2011 as evidenced by Ext.P2. The petitioner deposited EMD of Rs.5,000/- and Rs.1.10 Lakhs as evidenced by Exts.P3 & P4. ::2:: W.P.(C).No.11588 Of 2011 3. Ext.P2 is dated 5.3.2011. The case of the petitioner is that when he started to collect toll fee the vendors resisted the collection of fees stating that the toll fee fixed by the Municipality is exorbitant. In such circumstances, the petitioner submitted Ext.P5 representation dated 4.4.2011 before the 2nd respondent. In Ext.P5, the petitioner has stated that due to the resistance of the vendors he has suffered a heavy loss and requested the Municipality to solve the problem. Ext.P6 is the communication issued by the Municipality. In Ext.P6 it is stated that the right to collect fee from the fish market is provisionally awarded to the petitioner, that the auction amount is not proportionate to the increase in the amount of toll fees and due to resistance from the side of the merchants, the decision of the Tax & Finance Committee is not accepted by the Municipal Council and therefore the Municipal Council decided to cancel the right awarded to the petitioner to collect the fees from the fish market. According to the petitioner, the 2nd respondent cancelled the auction fixed in favour of the petitioner arbitrarily without giving an opportunity of being heard. It is also submitted that the petitioner is the sole person who participated in the auction process and he quoted an ::3:: W.P.(C).No.11588 Of 2011 amount of Rs.1.10 Lakhs for collecting fees from the fish market for the financial year 2011-2012, that he executed Ext.P2 agreement on 5.3.2011 and paid Rs.5,000/- as EMD and Rs.1.10 Lakhs as demanded by the Municipality, yet the Municipality is not permitting the petitioner to collect the fees (toll). 4. In the counter affidavit filed by the Municipality it is stated that the original auction was fixed on 18.2.2011, that since none of the bidders quoted more than Rs.1.5 Lakhs, the auction was not confirmed in favour of anyone, that thereafter fresh tenders were invited as per Ext.P1 and the auction was conducted on 5.3.2011. The bid of the petitioner was accepted and the petitioner executed Ext.P2 agreement on 5.3.2011. It is also admitted that the petitioner has deposited Rs.5,000/- as EMD and Rs.1.10 Lakhs as bid amount on 5.3.2011. It is contended by the Municipality that the auction held pursuant to Ext.P1 was provisional subject to confirmation by the Municipal Council under Section 218(3) of the Municipalities Act. It is contended that the competent authority to finalise tender is the Municipality. In the counter affidavit it is also pointed out that Section 218 (c) is mandatory by referring to the decision ::4:: W.P.(C).No.11588 Of 2011 reported in Paraman v. Kodungallur Municipality (2005 (3) KLT 53). It is also pointed out that no contract shall be made by the Secretary unless tender has been accepted by the competent authority in the light of the provisions contained in Section 218 (1). 5. It is not disputed that the Municipality provisionally accepted the bid and also received payments. Subsequently, the matter was placed before Tax & Finance Committee. The Tax & Finance committee also approved the bid in favour of the petitioner. The Municipal council by Ext.P6 order cancelled the bid. The reasons stated by the Municipal Council is that the amount was too low and the same was not proportionate to the increased rates which are permitted to be collected from the vendors. In the meeting on the Municipal Council dated 30.3.2011 a decision to revise the rate was taken by the Tax & Finance Committee on 5.3.2011. During the course of hearing, the Municipality has produced the copy of the resolution of the Muncipal Council held on 30.3.2011. The resolution dated 30.3.2011 shows that the Tax & Finance Committee has decided to revise the increased rate on 5.3.2011. After accepting the bid ::5:: W.P.(C).No.11588 Of 2011 and receiving the amount, the Municipal Council is not justified in not accepting the bid finally simply for the reason that the amount obtained as per the bid was not proportionate to the increased rate which are permitted to be collected from the bidders. Technically, Municipality may be justified in contending that unless the competent authority accept the tender there is no valid tender and therefore the petitioner cannot claim that he is entitled to collect fees for the financial year 2011-2012. It is also true that the acceptance of the bid amount or the security amount of EMD does not confer any right on the petitioner unless the bid is finally accepted by the Municipal Council. At the same time, it is a fact that the bid was accepted provisionally and subsequently approved by the Tax & Finance Committee. There is no justified reason in this case for the Municipal Council in not approving the decision of the T & F Committee. The only reason stated is that the amount obtained as per the bid is not proportionate to the increased rates which are permitted to be collected from the vendors. 6. The bid was for the current financial year, i.e., 1.4.2011 to 31.3.2012. Already four months and 15 days have ::6:: W.P.(C).No.11588 Of 2011 elapsed. The petitioner is ready and willing to collect the fees for the rest of the period and for the bid amount since the bid amount is paid for the period of 12 months. Though the Municipality had cancelled the bid on 1.4.2011 for the last more than 4 months they have not taken any action to conduct re- auction. In the above circumstances, there is every possibility that the bid amount may not exceed Rs.1.10 Lakhs even if the re-auction is conducted at this distance of time. The petitioner was not heard before passing Ext.P6 order. In the aforesaid circumstances, this Court is of the view that Ext.P6 order is not justified under any circumstance and was passed arbitrarily and without affording an opportunity of being heard to the petitioner. Therefore, a direction is issued to the respondents to pass orders within a week permitting the petitioner to collect the toll fee from the fish market for the current financial year. The writ petition is allowed as above. HARUN-UL-RASHID, Judge. bkn/-