IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN TUESDAY, THE 24TH NOVEMBER 2009 / 3RD AGRAHAYANA 1931 WP(C).No. 12182 of 2009(P) -------------------------------------- PETITIONER: ------------------- SADASIVAN.M.G.,AGED 42 YEARS, S/O.GOPALAN NAIR,MANJUMANKAL, ANGADI VILLAGE,RANNI TALUK, PATHANAMTHITTA DISTRICT. BY ADV. MR.V.SETHUNATH. RESPONDENTS: ------------------------ 1. THE RANNI ANGADI GRAMA PANCHAYATH, REPRESENTED BY ITS SECRETARY,RANNI TALUK, PATHANAMTHITTA DISTRICT. 2. K.C.HASSAN KUTTY, THAIPARAMBIL HOUSE, POOTHAKKUZHY,KANJIRAPPALLY P.O. R1 BY ADV. MR.JACOB P.ALEX, R2 BY ADV. MR.T.M.ABDUL LATHEEF. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/11/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.12182/2009-P: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE QUOTATION NOTIFICATION DTD. 28/03/09. EXT.P.2: COPY OF THE RECEIPT ISSUED TO THE PETITIONER DTD. 04/04/2009. EXT.P.3: COPY OF THE NOTICE ISSUED BY THE R.1. TO THE POLICE. EXT.P.4: COPY OF THE ANSWERS TO THE QUESTIONER, THE COPY OF THE NEGOTIATION STATEMENT & THE QUOTATION SUBMITTED BY THE R.2. RESPONDENTS' EXHIBITS & ANNEXURE: EXT.R1.A: COPY OF THE AUCTION NOTICE BEARING NO. C2-115/09 DTD. 06/03/2009. EXT.R1.B: COPY OF THE AUCTION DIARY DTD. 17/03/2009. EXT.R1.C: COPY OF THE AUCTION NOTICE DTD. 18/03/2009. EXT.R1.D: COPY OF THE AUCTION DIARY DTD. 24/03/2009. EXT.R1.E: COPY OF THE AUCTION NOTICE DTD. 23/03/2009. EXT.R1.F: COPY OF THE AUCTION DIARY DTD. 30/03/2009. EXT.R1.G: COPY OF THE DECISION NO.1 OF THE PANCHAYAT ON 30/03/2009. EXT.R1.H: COPY OF THE TENDER DETAILS DTD. 04/04/2009. EXT.R1.I: COPY OF THE DECISION DTD. 06/04/2009. EXT.R1.J: COPY OF THE LETTER DTD. 06/04/2009 TO THE PETITIONER. EXT.R1.K: COPY OF THE AGREEMENT DTD. 07/04/2009. EXT.R2.A: COPY OF THE RESOLUTION DTD. 06/04/2009 PASSED BY THE R.1. (PANCHAYATH). EXT.R2.B: COPY OF THE RECEIPT DTD. 06/04/2009. EXT.R2.C: COPY OF THE AGREEMENT NO.02/09-10 DTD.07/04/2009 EXECUTED BY THE PETITIONER AND THE R.1. (PANCHAYATH). W.P.(C). NO.12182/2009-P: EXT.R2.D: COPY OF THE PETITION DTD. 08/04/2009 SUBMITTED BY THE PETITIONER BEFORE THE CIRCLE INSPECTOR OF POLICE, RANNI. ANNEXURE I: COPY OF THE DECISION BEARING NO.1 DTD. 09/10/2009 IN THE SPECIAL MEETING OF THE RANNI-ANGADI GRAMA PANCHAYAT. //TRUE COPY// P.S. TO JUDGE. Prv. THOTTATHIL B.RADHAKRISHNAN, J. ------------------------------------------- W.P(C).No.12182 OF 2009 ------------------------------------------- Dated this the 24th day of November, 2009 JUDGMENT 1.The first respondent grama panchayat invited quotations by following the procedure of sealed tenders and then open competition. The second respondent was the successful tenderer. The petitioner, the contractor for the previous year, moved this Court on 7.4.2009 and an interim order was granted by this Court on 8.4.2009, as prayed for, thereby precluding the second respondent from vending meat, though he was the successful bidder. 2.The second respondent promptly brought up the matter and obtained an order on 15.5.2009 on I.A.5729/09, precluding the petitioner from vending meat from the premises. 3.The first respondent came on record, not only with its counter affidavit but a further affidavit dated 11.7.2009, clearly WPC.12182/09 2 repudiating the stand of the writ petitioner that he was not called for negotiation. The first respondent panchayat, through its secretary, candidly admitted that it does not have any documentary evidence to prove the convening of a meeting on 6.4.2009 as there was no prior written notice issued on 4.4.2009. However, it had categorically asserted in paragraphs 4 and 5 as follows: “As stipulated in Exhibit R(1)(a), auction was conducted on 17.03.2009 and with respect to the auction conducted with respect to item No 1(2), no participants were willing to quote any amount. True copy of the auction diary is produced herewith and marked as Exhibit R(1)b. Consequently the said auction was adjourned and second auction with respect to the said item No 1(2) was conducted on 24.03.2009. True copy of the auction notice dated 18.03.2009 and auction diary dated 24.03.2009 are produced herewith ad marked as Exhibit R(1)c ad Exhibit R(1)d respectively. As evident from Exhibit R (1)d, in the second auction also no participants were willing to quote any amount. Thereafter a third auction was conducted with respect to item No 1(2) in WPC.12182/09 3 Exhibit R(1)a on 30.03.2009. True copy of the auction notice dated 23.03.2009 and auction diary dated 30.03.2009 is produced herewith and marked as Exhibit R(1)e and Exhibit R(1)f respectively. As evident from R(1)f, even on the third occasion no participants quoted any amount and as such no auction was conducted. In this circumstance, Secretary of the Panchayat in consultation with the committee members decided to invite 'quotation by tender' and took steps for the same. Later, the committee of the Panchayat met on 20.03.2009 and ratified the decision to invite the 'Quotation tender' and further decided that if the amount offered in the quotation is less than the amount in the previous year, to invite negotiation. It was also decided to fix the amount based on negotiation from among the persons participated in the 'Quotation' tender and to award the right only if at least 70% of the previous year's amount is quoted. True copy of the decision No 1 of the Panchayat on 30.03.2009 is produced herewith and marked as Exhibit R(1)g”. WPC.12182/09 4 4.The clear offer, though not specific, was that the petitioner, if challenges the stand of the panchayat, could do so at the peril of the members and the secretary willing to tender evidence even by affidavits. This is how this Court views the contents of the affidavit dated 11.7.2009 filed on behalf of the first respondent. 5.Even as of now, there is no contradiction by the petitioner to that plea. 6.Thereafter, on 24.9.2009, with the aforesaid pleadings on record, the following order was issued: “The first respondent Grama Panchayat proposed to auction out the right to conduct the business of vending meat in a particular shop room. When auction proceeding failed on account of lack of public participation, the first respondent adopted a sealed cover procedure. The petitioner was found to be successful. He had quoted Rs.1,50,100/-. The auction was confirmed in his favour. But, later, on the WPC.12182/09 5 apparent reason that there was something fishy, there was a proposal to call the petitioner and the second respondent for negotiation. While the petitioner pleads that he was not notified of any such meeting, the second respondent, who had quoted Rs.1,50,000/- entered into negotiation and offered Rs.2,01,000/-. While the petitioner continues to assert that he had no notice of the negotiation proceedings, the Panchayat has filed a further affidavit dated 11.7.2009 following the earlier interim orders. In that counter affidavit, the Panchayat essentially suggests that the entire staff, who are named therein, had witnessed what transpired in that meeting and that they were vouchsafed for the presence of the petitioner and the second respondent. With the aforesaid materials, one fact is certain. When the second respondent quoted Rs.1,50,000/- in a sealed cover, the petitioner was able to quote Rs.1,50,100/-. Both those amounts dwindle looking at the amount of Rs.2,01,000/- offered by the second respondent in the negotiation. Obviously, the ultimate interest of LSGI is only to generate maximum fund. Therefore, taking that as the sole criterion and in view of the offer of the petitioner WPC.12182/09 6 also to make an offer at Rs.2,01,000/-, the amount reached at by the second respondent, it is ordered that the Panchayat will conduct an open auction with only the petitioner and the second respondent participating and the minimum amount being pegged at Rs.2,01,000/-. If the auction does not generate anything more than Rs.2,01,000/-, it will be knocked down in favour of the second respondent. Otherwise, the result will depend upon the amounts quoted. This amount, which comes by the auction, will represent the total amount payable for 12 months. The question of reduction of the period from which the term of the contract will be open will be decided later on. All other issues are left open for further consideration”. 7.Following the aforequoted order, auction was conducted. The amount that the panchayat ultimately derived at that auction was much above what was originally quoted by the petitioner. The amount quoted by the petitioner was Rs.2,35,000/- and the auction was knocked down in favour of the second respondent who quoted Rs.2,50,000/-. WPC.12182/09 7 8.When the matter was listed on 21.10.2009, in view of the submissions made, the following order was granted: “Read the order dated 24.9.2009. Auction has been conducted on the basis of that order and the second respondent was the highest bidder. The auction will stand confirmed in his name and the Panchayat can permit him to carry on the activities in terms of the auction. The last three sentences of the order dated 24.9.2009 leave open the question of reduction, as also, the period from which the term of the contract will open. The Panchayat also requests through its learned counsel that the question of the petitioner's liability, if any, may also be adverted to in this case, having regard to the fact that the interim order obtained by him had deprived the Panchayat of income for nearly seven months. These submissions are recorded. 9.With the aforesaid, four factors emerged. WPC.12182/09 8 (i) The bid that now stands confirmed in favour of the second respondent is for the whole term of the financial year 2009- 2010, though the auction was in October, 2009 and the second respondent could commence activities only on 9.10.2009. (ii) The writ petition was filed on the specific plea that Ext.P3 evidencing the grant of the contract to the second respondent is issued by way of negotiation and that the second respondent did not quote any amount and did not participate in the auction. This plea stands specifically contradicted. (iii) It has to be taken that as of now, the petitioner does not contradict the clear averment in the affidavit dated 11.7.2009 regarding what transpired on 6.4.2009. (iv) The interim order granted by this Court on 8.4.2009 set at naught the right of the second respondent to commence operation and the interim order granted on 15.9.2009 forfeited the petitioner from carrying on the activity. As a result, the WPC.12182/09 9 panchayat stood deprived of amounts that would have accrued to it even at the rates originally quoted. 10.With the aforesaid, the fact is that the second respondent has bid following the order dated 24.9.2009 as if the auction is for the entire term from 1.4.2009 to 31.3.2010. He can be left with liberty to seek sympathetic indulgence of the panchayat committee on any application for remission which he may file before it, having regard to the relevant facts and circumstances. The Local Self Government Institution being an institution of self governance, would then address that issue. 11. Equally important is the issue as to whether the petitioner has to compensate the panchayat for the situation obtained by the interim order dated 8.4.2009. In so far as the petitioner is concerned, he continued to conduct the meat shop from 4.4.2009 until 15.5.2009, on the strength of the interim order dated 8.4.2009. He had offered Rs.2,35,000/- in the auction WPC.12182/09 10 held following the interim order dated 24.9.2009. That auction was confirmed in favour of the second respondent for an amount of Rs.2,50,000/-. The petitioner had actually conducted the shop for more than one and half months, after 4.4.2009. The difference between what he had originally offered and what was offered by him following the interim order dated 24.9.2009 cannot also be ignored. Contextually, the learned counsel for the panchayat rightly referred to the decision the the Apex Court in Karnataka Rare Earth v. Senior Geologist, Department of Mines & Geology [(2004) 2 SCC 783] to state that the panchayat is entitled to restitution of loss suffered owing to the petitioner obtaining the interim order. Taking all relevant facts and circumstances into consideration, it is directed that if an amount of Rs.50,000/- is paid by the petitioner to the panchayat, that may, though not fully, compensate the panchayat for any loss sustained owing to the situation obtained as per the interim order dated 8.4.2009. WPC.12182/09 11 12.In the result, this writ petition is ordered directing that the fact situation obtained as of now will continue and the amounts paid by the petitioner following the auction that is subject matter of this writ petition will be returned to him after deducting Rs.50,000/-. The second respondent will be at liberty to seek the indulgence of the panchayat for remission of any amounts in terms of what is stated above. Sd/- THOTTATHIL B.RADHAKRISHNAN, Judge. kkb.25/9.