IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN MONDAY, THE 25TH MAY 2009 / 4TH JYAISHTA 1931 WP(C).No. 7412 of 2009(V) ------------------------- PETITIONER(S): --------------- N.ASHRAF,S/O.IMBICHIKOYA,AGED 47 YEARS, 'SAFANA MANZIL',THEKKANNI THAZHA,P.O.MAKKADA, KAKKODI, CALICUT. BY ADV. SRI.K.M.FIROZ RESPONDENT(S): --------------- 1. KALPATTA MUNICIPALITY, OFFICE OF KALPETTA MUNICIPALITY, KALPETTA, REPRESENTED BY ITS SECRETARY. 2. THE STATE OF KERALA,REPRESENTED BY ITS SECRETARY,LOCAL SELF GOVERNMENT (L)DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. R1 BY ADV. SRI.JOE JOSEPH KOCHIKUNNEL R2 BY GOVT. PLEADER SRI.MATHEW VADAKKEL THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/05/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN WPC.7412/09 PETITIONER'S EXHIBITS: EXT.P1: A TRUE COPY OF THE RECEIPT NO.20689 DATED 17.2.2009 ISSUED BY THE FIRST RESPONDENT MUNICIPALITY TOWARDS THE DEPOSIT AMOUNT OF COMFORT STATION TENDER (OLD BUS STAND) EXT.P2: TRUE COPY OF THE AUCTION/QUOTATION NOTICE ISSUED BY THE MUNICIPALITY PROPOSING ORIGINAL AUCTION/TENDER ON 17.2.2009. EXT.P3: TRUE COPY OF THE RE-AUCTION NOTICE/TENDER NOTICE PUBLISHED BY THE FIRST REPSONDENT MUNICIPALITY DATED 4.3.2009. RESPONDENT'S EXHIBITS: EXT.R1(a): PHOTOCOPY OF TENDER NOTICE DATED 3.2.2009 ISSUED BY THE KALPETTA MUNICIPALITY. EXT.R1(b): PHOTOCOPY OF TERMS AND CONDITIONS OF THE TENDER NOTIFICATION. EXT.R1(c): PHOTOCOPY OF THE NOTICE DATED 5.3.2009 ISSUED BY THE MUNICIPALITY. /TRUE COPY/ THOTTATHIL B.RADHAKRISHNAN, J. ------------------------------------------- W.P(C).No.7412 OF 2009 ------------------------------------------- Dated this the 25th day of May, 2009 JUDGMENT 1.The first respondent Kalpatta Municipality notified the auction of, among other things, the licence to man the comfort station of that municipality. The petitioner quoted the highest amount to conduct the comfort station at the old private bus stand in Kalpatta for the period of one year commencing from 1.4.2009. He deposited Rs.71,600/- being part of the bid amount of Rs.1,63,200/-, apart from depositing the EMD of Rs.10,000/-. Among other terms of the auction, the municipality was entitled to cancel the auction though it would be confirmed provisionally by the Secretary of the municipality. On 4.3.2009, the municipality published a notice for re-auction. This is under challenge. 2. The petitioner does not dispute that Ext.R1(b) discloses the conditions of the auction. Among other things, the Municipality is entitled to cancel the auction. The confirmation of the auction would be provisional and subject to WPC.7412/09 Page numbers acceptance by the council, following which, an agreement has to be executed between the parties. 3.In the case in hand, in the uncontroverted counter affidavit, the first respondent has stated that different tenderers were involved in an unhealthy formation of a cartel among the participants leading to the reduction in the auction amount. It is pointed out that though only sealed tenders were invited in the first instance, only two persons submitted quotations in sealed covers, though 8 persons participated in the auction by remitting Rs.10,000/- as EMD. The municipal authorities were satisfied that there is an oblique collusion between the different intending tenderers in such a manner as to defeat the larger public interest of generating the maximum possible fund. It is pointed out that in the year 2006-07, the bid amount was Rs.1,51,000/- followed by Rs.1,82,000/- in 2007- 08, however, that in 2008-09, it fell to Rs.1,35,00/- and the present bid for 2009-2010 is for Rs.1,63,000/-. The first respondent has the uncontroverted averment that even during WPC.7412/09 Page numbers the previous year, there were complaints about the formation of a cartel among the auctioneers in a bid to deprive the municipality of due revenue. 4.Though this Court had issued an interim order, directing that re-auction will be subject to the result of the writ petition, even that re-auction failed in the light of the fact that the interim order provided that such re-auction would be provisional. 5.In 2007-08, as already noticed, the auction amount was Rs.1,82,000/-. It was, therefore, suggested during the course of hearing on the previous occasions that if the petitioner offers at least an amount of Rs.2,00,000/-, the municipality could be persuaded to accept it. However, the petitioner is not interested in such a quietus to this litigation. Hence, the matter needs to be considered on the merits. WPC.7412/09 Page numbers 6.The petitioner participated in the auction. He was the highest bidder. He paid one half of the bid amount. But the auction was to be accepted by the competent authority and it was in the mean while, that the municipality had reasons to believe that the auction has been deflected by the unholy alliance between the different proposed bidders. It was accordingly that the municipality proceeded to re-auction after cancelling the auction already conducted. The petitioner's rights have not come to any concluded status. 7. This only means that there is no crystallised rights in favour of the petitioner whose entitlement would be only to return of the EMD and the amount paid by him. If, as a matter of fact, the bid was finalised and the contract had concluded and even if the petitioner would have violated the terms of the licence by failing to carry out the contract, he may be liable for the loss that may be caused to the municipality on re-auction. That stage has not yet reached. WPC.7412/09 Page numbers 8.Therefore, there is no legal right for the petitioner to insist that the auction in which he participated shall not be cancelled. 9.In the result, while rejecting the contentions of the petitioner, it is ordered that the municipality will return the EMD and the amounts deposited by the petitioner following the auction with interest at 6% per annum from the date of deposit till the date of return in these days of economic rescission. The writ petition is ordered accordingly, clarifying that the municipality is at liberty to conduct re-auction and the petitioner will be at liberty to participate in such re-auction on terms as may be fixed by the municipality for the re-auction. No costs. Sd/- THOTTATHIL B.RADHAKRISHNAN, Judge. kkb.25/5.