IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR TUESDAY, THE 16TH MARCH 2010 / 25TH PHALGUNA 1931 WP(C).No. 31958 of 2009(L) -------------------------------------- PETITIONER: ------------------- VIJAYA ELE-TECHS PRIVATE LIMITED, MANJUMMEL, UDYOGAMANDAL P.O, ERNAKULAM- 683 501, REPRESENTED BY ITS EXECUTIVE DIRECTOR, S.JAYATHILAKAN. BY ADV. MR.N.HARIDAS. RESPONDENTS: ------------------------ 1. STATE OF KERALA ,REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. CHIEF ENGINEER (BUILDINGS & LOCAL WORKS) PUBLIC WORKS DEPARTMENT,MUSEUM P.O, THIRUVANANTHAPURAM. 3. SUPERINTENDING ENGINEER (ELECTRICAL) OFFICE OF THE CHIEF ENGINEER, BUILDINGS AND LOCAL WORKS, PUBLIC WORKS DEPARTMENT, MUSEUM P.O, THIRUVANANTHAPURAM. R1 TO R3 BY GOVERNMENT PLEADER MR. K. RAMESH. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/03/2010, THE COURT ON 16/03/2010 DELIVERED THE FOLLOWING: W.P.(C). NO.31958/2009-L: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE NOTIFICATION NO. E42/9591/2009 DTD. 25/06/2009 ISSUED BY THE R.3. EXT.P.2: COPY OF THE MINUTES DTD. 18/07/2009 ISSUED BY THE R.3. TO THE PETITIONER. EXT.P.3: COPY OF THE PAGE NOS. 43 & 44 CONTAINING THE APPROVED MAKE OF MATERIALS ISSUED BY THE R.3. EXT.P.4: COPY OF THE LETTER DTD. 22/09/2009 ISSUED BY THE PETITIONER COMPANY TO THE R.3. EXT.P.5: COPY OF THE LETTER DTD. 10/10/2009 SENT BY PETITIONER TO THE R.3. EXT.P.6: COPY OF THE FAX MESSAGE SENT BY THE R.3. TO V-TECH ELECTRC GROUP. EXT.P.7: COPY OF THE LETTER DTD. 22/10/2009 ISSUED BY V-TECH ELECTRIC GROUP TO THE R.3. EXT.P.8: COPY OF THE LETTER DTD. 26/10/2009 SENT BY THE PETITIONER COMPANY TO THE R.3. BY SPEED POST. EXT.P.9: COPY OF THE LETTER DTD. 02/11/2009 SENT BY THE PETITIONER COMPANY TO THE R.3. EXT.P.10: COPY OF THE LETTER DTD. 29/09/2009 ISSUED BY THE V-TECH ELECTRIC GROUP TO THE R.3. EXT.P.11: COPY OF THE LETTER DTD. 01/12/2009 OBTAINED BY THE PETITIONER FROM THE STATE PUBLIC INFORMATION OFFICER, THIRUVANANTHAPURAM AS PROVIDED UNDER THE RIGHT TO INFORMATION ACT. EXT.P.12: COPY OF THE LETTER DTD. 06/11/2009 ISSUED BY THE R.3. TO THE PETITIONER. EXT.P.13: COPY OF THE COVERING LETTER DTD. 05/02/2010 ALONG WITH THE PRICE LISTS RELATING TO L T CABLES FOR THE PERIOD FROM 1/1/2008 TO 2/2/2010 CONTAINING 6 SHEETS OBTAINED BY THE PETITIONER FROM FINOLEX CABLES LTD., KOCHI. EXT.P.13.A: COPY OF THE COMPARATIVE STATEMENT OF THE PRICES OF MAJOR QUANTITIES OF DIFFERENT SIZE OF LT CABLES REQUIRED FOR THE WORK IN QUESTION, FOR THE PERIOD FROM 1/1/2008 TO 2/2/2010 ISSUED BY THE FINOLEX CABLES LTD., KOCHI. W.P.(C). NO.31958/2009-L: EXT.P.14: COPY OF THE RELEVANT PAGES VIZ. PAGE NOS. 1,9 & 10 OF THE SCHEDULE OF WORKS IN RESPECT OF TENDER NO.89/2009 RELATING TO THE WORK TO BE EXECUTED AT THE MEDICAL COLLEGE, ALAPPUZHA, ISSUED BY THE R.3. EXT.P.15: COPY OF THE RELEVANT PAGES VIZ. PAGE NOS. 1, 13, 15 TO 17 OF THE SCHEDULE OF WORKS IN RESPECT OF TENDER NO. 90/2009 RELATING TO A PORTION OF THE WORK TO BE EXECUTED AT THE MEDICAL COLLEGE, ALAPPUZHA, ISSUED BY THE R.3. RESPONDENTS' EXHIBITS: EXT.R1.A: COPY OF THE LETTER NO. VEPL/PWD/11/09, DTD. 10/10/09. EXT.R1.B: COPY OF THE NOTIFICATION NO. EL2-9591/2009, DTD. 24/10/2009. EXT.R1.C: COPY OF THE RELEVANT PAGE OF LOCAL DELIVERY BOOK. EXT.R1.D: COPY OF THE LETTER NO. 31672/G4/09/PR, DTD. 30/10/2009. EXT.R1.E: COPY OF THE LETTER NO. EL3/292E/08, DTD. 06/11/2009. EXT.R1.F: COPY OF THE LETTER NO. VEG/TEND-PWDT/555/09. DTD. 22/10/09. EXT.R1.G: COPY OF THE SELECTION NOTICE. EXT.R1.H: COPY OF THE NEGOTIATION LETTER NO. VEPL/PWD/12/09, DTD. 26/10/09. //TRUE COPY// P.S. TO JUDGE. Prv. T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No. 31958 of 2009-L - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 16th day of March, 2010. JUDGMENT The petitioner company is represented by its Executive Director in this writ petition. The challenge is against the refusal of the respondents to accept the tender submitted by the petitioner in respect of Tender No.95 in Ext.P1 with regard to electrical power distribution at the Medical College, Kottayam. Accordingly, the petitioner seeks for a direction to respondents 2 and 3 to refer the revised offer submitted by the petitioner company as per Ext.P8 to the Tender Committee for its final decision at the earliest. 2. The petitioner company has approached this Court in the following circumstances. By Ext.P1, the first respondent issued a tender notice in respect of two items of identical works, one at the Medical College, Thiruvananthapuram and the other at Medical College, Kottayam. The probable amount of contract in respect of Tender No.94/09, i.e. with respect to the work at Medical College, Thiruvananthapuram is Rs.3,35,23,365/- and the probable amount of contract in respect of the work to be executed at the Medical College, Kottayam is Rs.6,05,11,104/-. 3. The petitioner duly submitted the tender for both the works in time wpc31958 /2009 2 along with the required documents. Before submitting the tender, there was a pre-bid meeting on 18.7.2009 at 11 a.m. in the office of the third respondent, wherein the petitioner company also participated. All the three tenderers had the requisite pre-qualification and thereafter the tenders were opened on the appointed day at the prescribed time and it was found that the petitioner company has quoted the lowest rate in respect of the work to be executed at the Medical College, Kottayam, at 52% above the estimate rate. With regard to the work to be executed at Thiruvananthapuram Medical College, the lowest tender was from V-Tech Electric Group, i.e. 57% above the estimate rate. 4. In terms of the procedure prescribed, the lowest tenderers were invited for negotiation and the petitioner was invited by the third respondent on 22.9.2009 for a negotiation in respect of the tender submitted by them. The petitioner agreed to reduce by 3% from the percentage excess quoted, i.e. instead of 52%, it was limited to 49% above the estimate rate and Ext.P4 is the copy of the letter given in this regard. A further letter was given as per Ext.P5 also wherein the petitioner company explained the circumstances under which they are unable to reduce the rates substantially. According to the petitioner, they did not receive any further communication or information in this regard, but they came to know that the third wpc31958 /2009 3 respondent was negotiating with V-Tech Electric Group in respect of the work tendered for the Thiruvananthapuram Medical College, even by written communications and Ext.P6 fax message is produced in support of the above plea. In response to the said communication, the said group submitted Ext.P7 agreeing, to execute the work at 35% above the estimate rate, on certain conditions. It is the case of the petitioner that the tender of the said group was accepted in respect of Thiruvananthapuram Medical College. But, strangely in respect of the Kottayam Medical College, the third respondent did not give any information similarly to them and the petitioner company was denied the opportunity to reduce the rate mentioned in Ext.P4. According to the petitioner, this amounts to discrimination and arbitrary action. Again, they submitted Ext.P8 communication dated 26.10.2009 to the third respondent intimating that the petitioner is agreeable to execute the work at 35% above the estimate rate. Thereafter, there was no communication from the respondents. A further letter was forwarded by the petitioner to the Superintending Engineer, the third respondent on 2.11.2009 as Ext.P9 in the matter, but he did not respond. 5. Alleging that the third respondent, instead of entering into any negotiation with the petitioner or referring the tender for the decision of the Tender Committee, attempts to retender the work , the petitioner has filed wpc31958 /2009 4 this Writ petition. 6. Mainly, it is contended that the third respondent has taken a different stand and has initiated different steps with regard to the two tenders, viz. in respect of Kottayam and Thiruvananthapuram Medical Colleges, resulting in arbitrary and discriminatory action which is violative of Articles 14 and 19(1)(g) of the Constitution. What is highlighted in ground B of the writ petition is that even though the petitioner was the lowest tenderer in respect of the work at Medical College, Kottayam, and as the work in question with regard to the two Medical Colleges are similar in nature, i.e. the nature of work, method of execution, quality of materials, etc., the attitude is not even handed, as far as the process to award the work is concerned whereas in Thiruvananthapuram, the work has been awarded at a lower rate and even though the petitioner offered for the same rate, no communications have been issued in the matter. It is offered that the petitioner is prepared to execute the work at 35% above the estimate rate. 7. The first respondent has filed a counter affidavit and the petitioner has filed a reply affidavit and an additional reply affidavit. The first respondent has lastly filed an additional counter affidavit and the petitioner has filed a further reply affidavit to the said additional counter affidavit. 8. The stand taken by the first respondent in the matter, in a nutshell, wpc31958 /2009 5 is the following: The petitioner was the LI contractor who quoted the lowest rate for the execution of the work in Medical College Hospital, Kottayam, quoting the initial rate as 52% above the estimate rate. When negotiated to reduce the rate, he reduced only 3% bringing down the tender excess to 49% above estimate rate. When he was asked to reduce the rate further, he took an adamant stand and has given a detailed letter stating that he was not in a position to reduce the rates further. The third respondent had given two chances to the contractor to reduce the rates to a reasonable limit in order to recommend to the Government Tender Committee. As there was no response from the contractor in reducing the tender excess, the third respondent was forced to retender the work with the approval of the 2nd respondent Chief Engineer, as per notification dated 24.10.2009 which was forwarded to the Director of Public Relations on 26.10.2009. The Public Relations Department as per their letter dated 30.10.2009 intimated that they have given instructions vide release order No.345/01/09/PR dated 29.10.2009 to publish the Tender Notification in the next immediate issue of the daily ‘Deshabhimani’. The petitioner has forwarded a letter showing his willingness to execute the work at 35% above estimate rate only after the tender notice was forwarded to the Director of Public Relations for publication. It is further pointed out that 35% above estimate rate is not at wpc31958 /2009 6 all reasonable in any way. The inability of the third respondent to accept the reduced rate of 35% above estimate rate after re-tendering the said work, has been intimated to the petitioner vide letter dated 6.11.2009. It is further averred that knowing that the work is retendered on 24.10.2009, the petitioner sent a suo motu negotiation letter dated 26.10.2009 reducing the quoted rate to 35% above estimate rate. Since it was received after inviting retender, it was not considered. In para 9 of the counter affidavit, it is further explained thus: “The major components of both the works are almost the same and the cost element is almost the same except for L.T. cabling work. For the work in MCH, Thiruvananthapuram, the cost component for LT cabling work is only Rs.6,64,095.00 where as for the work in MCH, Kottayam the cost component for LT cabling work is Rs.2,91,27,655.00. Hence, it can very well be seen that for the work in MCH, Kottayam there is an additional amount of about Rs.285.00 lakhs for LT cabling work alone. Today, the LT cable market is highly competitive due to emergence of many new companies. Also, there is substantial reduction in cost of LT cable due to reduced price of raw materials due to economic recession. For works having substantial component for the cabling work, the contractors used to quote very low rates bringing the quoted rates even below estimate rates, when there is healthy competitions. For example, a work recently tendered, viz. the work “PMSSY - wpc31958 /2009 7 Installation of CT, MI & CATH Lab in Medical College Hospital, Thiruvananthapuram” in which LT cabling was the main component. The cost component for panel boards is Rs.5,43,250/- and the cost component for LT cabling is Rs.29,35,309/-. The total estimate PAC is Rs.34,86,163.47. The lowest tenderer quoted 27% below estimate rate.................. Considering the above facts, the reduced rate of 49% offered by the petitioner is not at all justified. Even the reduced rate offered by the petitioner contractor in his suo moto negotiation at 35% above estimate rate is not at all reasonable since the cost component for the LT cabling work for the work in Medical College, Kottayam is huge, ie Rs.2,91,27,655/-. So, the tender of the petitioner cannot be recommended to Government Tender Committee for acceptance as it will cause huge drain of Exchequer.” 9. The petitioner has replied to the above contentions in the reply affidavit and in the additional reply affidavit. 10. Heard learned counsel for the petitioner Shri N. Haridas and Shri K. Ramesh, learned Govt. Pleader. 11. It was contended by the learned counsel for the petitioner that the third respondent has clearly discriminated the petitioner while in similar circumstances, recommended the contract in favour of the lowest tenderer in respect of the work at Medical College, Thiruvananthapuram. It is submitted that the petitioner was not given any opportunity after the first wpc31958 /2009 8 negotiation unlike the other tenderer. It is pointed out that by Ext.P6 a specific communication was given to the lowest tenderer in respect of the work at Trivandrum Medical College, which evidences the fact that actually he was interested in the award of works in respect of the said Medical College, whereas the petitioner was not given a fresh opportunity in the matter. It is submitted that the attitude and approach was not even handed. In this context, learned counsel for the petitioner invited my attention to decision No.4 taken in the pre-bid meeting, the minutes of which have been produced as Ext.P2. It is submitted that decision No.4 therein shows that outsourced equipments and fabrication done outside the factory will not be acceptable, which is reiterated in Ext.P3 also in column No.30. It is pointed out that as far as the work in Thiruvananthapuram Medical College is concerned, going by Ext.P7 letter issued by the V-Tech Electric Group who are the successful tenderer therein, even this condition has been sought to be modified, for which the third respondent has no power. It is therefore submitted that clearly this brings out the attitude of the third respondent which is discriminatory. It is further pointed out that the petitioner had submitted Ext.P4 offering a reduction of 3%. Later, after coming to know of Exts.P6 and P7 with regard to the negotiation in respect of the work in Thiruvananthapuram Medical College, they submitted Ext.P8 agreeing to wpc31958 /2009 9 execute the work at 35% above the estimate rate. 12. It is further pointed out that the justification now sought for in the counter affidavit cannot be believable also. My attention was drawn to Ext.R1(f), the copy of a handwritten letter given by the Director of V-Tech Electric Group for the execution of the work in Thiruvananthapuram Medical College, which according to the learned counsel for the petitioner, is not at all believable also. 13. The petitioner is mainly aggrieved by the non-furnishing of a reasonable opportunity in the matter which is a part of the principle of Article 14. Only one chance was given to the petitioner whereas two chances were given to the tenderer of the work in the other Medical College, is the contention. It is well settled that there should be a level playing field to all tenderers as far as the procedure for award of works are concerned. Herein, going by the averments in the counter affidavit and the additional counter affidavit, it can be seen that in the first negotiation the petitioner reduced the rate to 3%. It is pointed out that again they were asked to reduce the rate further, but by Ext.R1(a) produced along with the counter affidavit, the petitioner took the stand that they are unable to make any further reduction. Significantly, a reading of Ext.R1(a) shows the fact that after the negotiation held on 22.9.2009 and the revised offer made by wpc31958 /2009 10 the petitioner on the same day, there had been further discussions. This is clear from the first sentence in Ext.R1(a) letter dated 10.10.2009 which shows that Ext.R1(a) (Ext.P5 produced in the writ petition) is in response to further discussions made by the third respondent, wherein a request was made to reduce the rates further. This is evident from the following sentence: “This has reference to the above and further discussions requesting us to reduce our rates further.” References therein are the tender, the offer dated 11.8.2009 and the negotiation and the revised offer on 22.9.2009 (Ext.P4). Therefore, it is evident that there had been further discussions with the third respondent wherein there was a further request to reduce the rates by the petitioner from the part of the Superintending Engineer. Finally, by Ext. R1(a), the petitioner has informed that they are unable to make any further reduction in the matter. Therefore, the stand taken by the third respondent in the counter affidavit as well as additional counter affidavit in para 6 that when the petitioner was asked to reduce the rate further, they took an adamant stand not to reduce the rate, is clearly supported by Ext.R1(a) (Ext.P5). It is reiterated in the last para of the said letter that “considering the above aspects, we feel the revised rate offered by us is reasonable and we are unable to make any further reduction.” It is in that background, the contention raised by the petitioner in the writ petition wpc31958 /2009 11 that there was a different attitude to them, has to be analysed. It is evident and amply clear from the counter affidavit and in the additional counter affidavit that the petitioner was given two chances to reduce the rate. The retender notification is dated 24.10.2009 (Ext.R1(b). Ext.R1(c) shows that the retender notification was forwarded to the Director of Public Relations, which was acknowledged by them on 26.10.2009. Steps were taken to publish the same on 29.10.2009 also and the details were published in the search window iprd09/m 2927. This is supported by Ext.R1(d). The revised offer by the petitioner was voluntary and not in response to any oral communication from the third respondent also. The revised offer made by the petitioner to reduce the rate upto 35% above estimate rate is dated 26.10.2009. Therefore, evidently as contended by the respondents, this is an after thought, after coming to know about the steps for retender of the work. 14. Then, the further question is whether Ext.P9 ought to have been acted upon by the third respondent. While considering this aspect, the stand taken in the counter affidavit with regard the rate quoted by the petitioner at 35% above the estimate rate, and the rate at which the work was accepted by the Tender Committee in respect of Thiruvananthapuram Medical College, are relevant. Going by the counter affidavit of the third wpc31958 /2009 12 respondent, as far as the acceptance of tender with regard to the Thiruvananthapuram Medical College is concerned, the work is now approved at 25% above the estimate rate by the Government Tender Committee and the Contractor agreed to execute the work accordingly. He was not adamant also in reducing the rate reasonably, which according to the third respondent, is a positive attitude, whereas the petitioner has taken an adamant attitude as per Ext.R1(a), not to reduce the estimate rate from 49% above. Therefore, it is clear from the pleadings that the third respondent has really decided to retender the work in the light of the stand taken by the petitioner in Ext.R1(a), that the rate cannot be reduced further. 15. Apart from the above, the third respondent has sought justification in para 9 of the counter affidavit which is already extracted above, that even the reduced rate offered by the petitioner at 35% above estimate rate is not at all reasonable, since the cost of component for the LT cabling work for the work in Medical College, Kottayam is huge, i.e. Rs.2,91,27,655/-. It is stated that the same cannot be recommended to the Government Tender Committee for acceptance as it will cause huge drain on Exchequer. This explanation is offered in the light of the fact that LT cable market is highly competitive and there is substantial reduction in cost due to reduced price of raw materials due to economic recession and in wpc31958 /2009 13 respect of such components for the cabling work, the contractors used to quote very low rates bringing the quoted rates even below estimate rates, when there is healthy competitions and an example also is quoted with regard to the work PMSSY by installation of CT, MRI and CATH Lab in Medical College Hospital, Thiruvananthapuram in which the LT cabling work was the main component and the lowest tenderer quoted 27% below estimate rate. Ext.R1(g) is the selection notice issued in respect of the said work. 16. One of the explanations offered with regard to the negotiation in respect of the work in Thiruvananthapuram Medical College is that the contractor was not initially responding to the personal requests and it is in that circumstances, Ext.P6 fax message was sent. Thereafter, he reduced the rate to 35% in writing without changing any conditions of the tender. It is therefore contended that no discrimination was there from the part of the third respondent. I see much force in the above contention. The third respondent had not acted in any undue haste or extended any favour in issuing a communication as per Ext.P6 to the contractor for the execution of the work in respect of the Medical College, Thiruvananthapuram. As noticed already, the petitioner was being asked to reduce the rate, but even then, the rate was reduced only by 3% as per Ext.P4 which is evident from wpc31958 /2009 14 Ext.P5 letter dated 10.10.2009 of the petitioner and he had further discussed also in the matter with the third respondent. The contention raised by the third respondent with regard to the issuance of Ext.P6 to the contractor for the tender in respect of Thiruvananthapuram Medical College, has therefore to be accepted. There is nothing unusual in issuing such a communication as per Ext.P6. 17. As far as the principles governing the matter is concerned, it is well settled by various decisions of the Apex Court that the concept of “level playing field” which is embodied in Article 19(1)(g) will apply. In the decision of a Division Bench of this Court in M/s. Zoom Developers Pvt. Ltd. v. State of Kerala and others (2008 (4) KHC 934), the Bench has quoted a dictum laid down by the Supreme in Court Reliance Energy v. MSRDC Ltd. {(2007) 8 SCC 1} in para 85 which reads thus: “Article 14 of the Constitution embodies the principle of 'non- discrimination'. However it is not a free standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to 'right to life'. It includes 'opportunity'. In our view, as held in latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N., 2007 (2) SCC 1, Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. 'Level wpc31958 /2009 15 playing field' is an important concept while construing Article 19(1) (g) of the Constitution. It is entitled to invoke the said doctrine of 'level playing field'. We may clarify that this doctrine is, however subject to public interest. In the world of