IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 9TH JULY 2008 / 18TH ASHADHA 1930 WP(C).No. 18729 of 2008(D) -------------------------- PETITIONER --------------- GANESH B. MENON, S/O.BHASKARA MENON, THANATH HOUSE, MANJAPETTY, MARAMPILLY.P.O, VAZHAKULAM VILLAGE, KUNNATHUNADU TALUK, ERNAKULAM DT. BY ADV. SRI.K.A.JALEEL RESPONDENTS ------------------ 1. SREEMOLANAGARAM GRAMA PANCHAYATH, REP. BY ITS SECRETARY, SREEMOLANAGARAM.P.O. 2. VAZHAKULAM GRAMA PANCHAYATH, REP. BY ITS SECRETARY, MARAMPILLY.P.O. 3. THE DEPUTY DIRECTOR OF PANCHAYATHS, ERNAKULAM, CIVIL STATION, KAKKANAD. 4. STATE OF KERALA, REP. BY THE SECRETARY TO GOVERNMNET, LOCAL SELF GOVERNMENT DEPARTMENT, SECRETARIAT, TRIVANDRUM. 5. THE DIRECTOR, VIGILANCE AND ANTI-CORRUPTION BUREAU, TRIVANDRUM. BY ADV. SRI.K.S.AJAYAGHOSH FOR R1 DR.K.P.SATHEESAN FOR R2 SRI.K.K.GOPINATHAN NAIR FOR R2 SRI.M.R.JAYAPRASAD FOR R2 SRI.P.MOHANDAS (ERNAKULAM) FOR R2 GOVT.PLEADER SRI.K.V.MANOJ KUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.18729/08 APPENDIX PETITIONER'S EXHIBITS EXT.P1: TRUE COPY OF the NOTICE DT 25.2.2008 ISSUED BY THE 1ST RESPONDENT. EXT.P2: TRUE COPY OF THE JUDGMENT DATED 9.5.2008 IN WPC NO.13902/2008 OF THIS HON'BLE COURT. EXT.P3: TRUE COPY OF NOTICE DT 1.6.2008 FOR CONDUCTING PUBLIC AUCTION ON 16.6.2008 ISSUED BY THE 1ST RESPONDENT. //TRUE COPY// P.A. TO JUDGE ANTONY DOMINIC, J. =============== W.P.(C) NO. 18729 OF 2008 D ==================== Dated this the 9th day of July, 2008 J U D G M E N T The prayers in this writ petition are the following. 1) issue a writ of mandamus or any other appropriate writ, order or direction, directing the 1st respondent to fix and confirm the public auction in the name of the petitioner in the light of non-remittance of bid amount by the 1st and 2nd highest bidders, to conduct the Manjapetti-Thekke Kovilakom Jankar service for the period of two years from 1.7.2008 to 31.3.2010. 2) issue a writ of mandamus or any other appropriate writ, direction or order, directing the 5th respondent to conduct an enquiry regarding the criminal conspiracy and foul play which lead to the loss of public money in connection with the public auction conducted on 16.6.2008 by the 1st respondent Grama Panchayath regarding the right to conduct the Manjapetti-Thekke Kovilakom Jankar service for the period from 1/7/2008 to 31.3.2010. 2. The controversy in this writ petition concerns the conduct of Jankar service connecting Manjapetty-Thekkekovilakom area touching the 1st and 2nd respondent Grama Panchayats. It is stated that the auction right is shared between respondents 1 and 2 Panchayats and it is now the turn of the 1st respondent Panchayat to conduct the auction. 3. According to the petitioner, the previous auction was conducted by the 2nd respondent Panchayat and the period of contract WPC 18729/08 :2 : granted to the present contractor was up to 31/3/2008. Since the right to conduct fresh auction was that of the 1st respondent Panchayat, the 1st respondent issued Ext.P1 notice dated 25/2/2008 scheduling auction to 11/3/2008. However that auction was not held. It is stated that the present contractor, who was appointed by the 2nd respondent had in the meanwhile moved the Government praying for extension of the period of his contract. Based on Government order that was issued, the contract period was extended by 3 months and was to expire on 30th of June 2006. 4. While he was thus operating the Jankar service, a third party had filed a writ petition before this court as WP(C) No.13902/08 praying for directing the 1st respondent to expedite the auction. When the case was taken up for consideration on 9th of May 2008, submission was made on behalf of the 1st respondent that they had decided to hold the auction on 14th of June, 2008. This submission was recorded and the writ petition was accordingly disposed of by Ext.P2 judgment. It is stated that on 14/6/08 auction was not held and pursuant to Ext.P3 notice, auction was finally held on 16/6/2008. 5. It is on record that there were 14 participants and the petitioner herein was the 3rd highest bidder. It is admitted that the highest WPC 18729/08 :3 : bidder was one Ali, who had offered Rs.32,25,001/- and that he had committed default in paying the amount in terms of Ext.P3 auction notice. The 2nd highest bidder was one Azees, who had offered Rs.28,55,005/- also defaulted in making payment. 6. It is to be noticed that it is the specific case of the petitioner, pleaded in para 4 of the writ petition that both the aforesaid highest bidders had participated in the auction producing the consent letter of the present contractor. Such a consent letter was one of the requirements for pre-qualification in terms of Clause 1 of Ext.P3. Though two highest bidders committed default as above, auction was not confirmed in favour of the petitioner, the third highest bidder, who had offered Rs.26,60,000/-. It is in this factual background this writ petition has been filed alleging that the Panchayat was acting hands in glove with the present contractor and that it is on that basis auction is refused to be confirmed in his name so that the present contractor can continue on an adhoc basis. 7. According to the Panchayat, when the highest two bidders committed default, EMD of Rs.25,000/- each was forfeited and it was decided by its resolution dated 1/7/2008 to conduct a re-auction which is now scheduled to take place on 15/7/08. It is stated that the only concern WPC 18729/08 :4 : of the Panchayat is to realise maximum amount and for that it has opted to conduct a fresh auction. It is also contended that the EMD submitted by the petitioner was refunded by them in terms of Clause 7 of Ext.P3 auction notice and therefore petitioner cannot have any claim for confirming auction in his favour. 8. The fact that the highest two bidders did not make payments in terms of Ext.P3 auction notice, resulting in forfeiture of their EMD is not in dispute. If that be so, the next highest bidder is the petitioner. Panchayat contends that one of the reasons for not confirming auction in favour of the petitioner is that the offer made by him is less by Rs.6 lakhs as compared to the highest bidder. Yet another reason stated is that the EMD submitted by the petitioner was refunded by it as is obliged of it in terms of Clause 7 of Ext.P3 auction notice. 9. True the right of the Panchayat to cancel the auction cannot be questioned. But then if that right reserved is exercised in an arbitrary manner or with ulterior motives, it can certainly be called in question and interfered by this court. 10. While appreciating the contention of the petitioner and the Panchayat, this court has to take note of certain relevant background WPC 18729/08 :5 : facts. The present contractor who is operating the jankar service for Rs.12 lakhs and his term expired on 30th of March, 2008. His term was extended till 30th of June 2008 apparently following the government order and even thereafter, he is now continuing operation. In the auction held, though the highest bid was for more than Rs.32 lakhs, the Panchayat has fixed only an EMD of Rs.25,000/- each. The highest two bidders submitted their bids enclosing the consent letter from the existing contractor to lease out his jankar to them and this averment of the petitioner in para 4 of the petition is not refuted by the Panchayat. 11. It is in the above factual background, the petitioner positively contends that the aim of the Panchayat is only to facilitate continued operation of the existing contractor. On facts, I feel the petitioner is eminently justified in making this averment particularly when on account of their default all that has been lost by the 2 highest bidders is only Rs.25,000/- each, whereas the Panchayat by its own conduct is delaying finalisation of a contract in which, even if the 3rd highest bid was accepted that is more than Rs.14 lakhs of the present contractor's rate. 12. In so far as the plea that the rate offered by the petitioner is less by Rs.6 lakhs as compared to the highest bidder is concerned and WPC 18729/08 :6 : therefore it was decided to cancel the auction, I see no substance in that contention either. The reason is that if at all the Panchayat was anxious to realise anything near to the highest bid, there is absolutely no reason for the Panchayat offered the contract to the 2nd highest bidder whose offer was lower by Rs. 4 lakhs as compared to the offer made by the highest bidder without even a negotiation. 13. In so far as the plea raised by the learned counsel for the petitioner that the EMD made by the petitioner was refunded, the justification offered is Clause 7 of Ext.P3. Clause 7 in my view does not oblige the Panchayat to refund the amount of a person who has successfully participated in the auction. On the other hand a plain reading of Clause 7 shows that the refund of the EMD is only to be made to those who have not successfully participated in the auction. In this case, petitioner was the third highest bidder and therefore Clause 7 did not require the Panchayat to have made such a payment. Nor is it the case of the Panchayat that the refund was made at the request of the petitioner. Therefore, having wrongly and unilaterally made the refund, the Panchayat cannot now say that it should be exonerated of his obligations under Ext.P3. WPC 18729/08 :7 : 14. It may be true that based on such an erroneous action Panchayat has now scheduled auction to 15/7/2008, but then if the petitioner is justified in insisting that the auction should be settled in his name, the decision of the Panchayat cannot be held against the petitioner. 15. For all these reasons, I am satisfied that the petitioner is justified in seeking confirmation of the auction in his favour. Therefore, the writ petition is disposed fo directing that auction pursuant to Ext.P3 will be confirmed in favour of the petitioner. Panchayat is directed to require the petitioner to remit the EMD which it has refunded and confirm the auction in his name as expeditiously as possible, at any rate within 10 days of receipt of a copy of this judgment. 16. Needless to say that the above directions are issued on the assumption that the petitioner satisfied all eligibility conditions of Ext.P3 and this is a matter for the Panchayat to examine and in case if he does not satisfy any of the eligibility conditions of Ext.P3, Panchayat will not be bound to confirm the auction. Writ petition is disposed of as above. ANTONY DOMINIC, JUDGE Rp