IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI THURSDAY, THE 28TH MAY 2009 / 7TH JYAISHTA 1931 WP(C).No. 2307 of 2009(Y) --------------------------------------- PETITIONER(S): ------------------------ KOTTARAKKARA PUBLIC WORKS SKILLED WORKERS LABOUR CONTRACT CO-OPERATIVE SOCIETY LTD., Q-459, KOTTARAKKARA REPRESENTED BY THE SECRETARY, DEEPA DAVID. BY ADVS. MR.P.SANKARANKUTTY NAIR, MR.T.V.AJAYAKUMAR. RESPONDENT(S): --------------------------- 1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. 2. SECRETARY, KERALA STATE ELECTRICITY BOARD, THIRUVANANTHAPURAM. 3. CHIEF ENGINEER, KERALA STATE ELECTRICITY BOARD, THIRUVANANTHAPURAM. 4. EXECUTIVE ENGINEER, TRANSMISSION CONSTRUCTION DIVISION, KERALA STATE ELECTRICITY BOARD, THIRUVANANTHAPURAM. 5. GURU KRIPA CONSTRUCTIONS, KOLLAM. R1 BY GOVERNMENT PLEADER MR. M.A. ASIF R2 TO R4 BY ADV. MR.C.K.KARUNAKARAN, SC FOR KSEB R5 BY ADVS.MR.K.JAYAKUMAR, MR.R.SURAJ KUMAR, SMT.GEETHA P.MENON, MR.N.AJITH, MR.P.M.NEELAKANDAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/05/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.2307/2009 Y APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF THE GOVERNMENT ORDER NO.G.O.(MC) 135/97/CO-OP. DTD. 13/11/1997. P2: COPY OF THE BOARD ORDER NO.1284/98/TC4/PC/4/98 DTD. 14/06/1998. P3: COPY OF THE TENDER NOTIFICATION DTD. 14/11/2008 OF THE 4TH RESPONDENT. P4: COPY OF THE REPRESENTATION DTD. 6/12/2008 OF THE PETITIONER. RESPONDENT'S EXHIBITS: R2(A): COPY OF THE G.O.(P) NO.448/05 FINANCE DTD. 13/10/2005. /TRUE COPY/ P.A.TO JUDGE Kss V.GIRI, J ....................... W.P.(C).2307/2009 ....................... Dated this the 28th day of May, 2009 JUDGMENT Petitioner is a Labour Contract Society and it responded to Ext.P1 notification inviting tenders issued by the 4th respondent for the work of filling and levelling of the proposed 66 KV Sub Station Site at East Kallada. The estimated amount is (PAC of the work) Rs.19,33,146/-. Petitioner quoted at the rate 9.99 % above PAC. The 5th respondent quoted at the rate of 28.999% below the estimated amount. Tenders were opened on 3.12.2008 by the 4th respondent. Petitioner contends that the President of the Society who was present at that time, expressed his willingness to undertake the work at 10% above the lowest rate. This was again reiterated by Ext.P4 dated 6.12.2008. Nevertheless, the contract was ultimately awarded to the 5th respondent which has been questioned in this writ petition. W.P.(C).2307/2009 2 2. Petitioner contends that as a Labour Contract Society, it is entitled to a preference in the award of contracts, in accordance with clause 8 of Ext.P1 Government Order dated 13.11.1997 which provides for entrustment of the contract work to such Societies on preferential terms and conditions. Clause 8 of Ext.P1 order in so far as they are relevant, reads as follows:- Procedure for and conditions of award of contract :- 8(a).There will be regular tender for the works and the societies should present tenders in the manner prescribed by the work awarding authority. Where a society quotes lowest rates, it will be entitled to the work at the quoted rate. (b).In cases where a private contractor has quoted the lowest rate, the Labour Contract Co-operative Society which has quoted for the work will be given preference in awarding contracts as follows:- W.P.(C).2307/2009 3 (i).When the lowest tender is from a private contractor, the Labour Contract Co-operative Society will be awarded the work at 10% above the lowest tender, if the Society is willing to do the work. The work Awarding Authority should ascertain the willingness of the Labour Contract Society in writing. (ii).Where the quotation of a Labour Contract Co-operative Society is below the rate quoted by a private contract the work will be awarded to the Labour Contract Co-operative Society at the rate quoted by it. (iii).Where two Societies quote the same rate, negotiation will be held and the contract awarded to the society which is willing to do the work at the lowest rate, failing which lots will be taken in the presence of the representatives of the concerned Societies and the work will be awarded at the rates arrived as above. W.P.(C).2307/2009 4 (iv).In cases where Societies are unwilling to take up the work at the rates arrived at as above, the contract will be awarded to the lowest tenderer at the quoted rate. 3. Ext.P1 Government Order also exempts the Labour Contact Societies from payment of security deposit and earnest money. It is contended that Ext.P1 Government Order has been adopted by Ext.P2 order of the KSEB. Therefore, the terms and conditions mentioned in the said G.O including clause 8 thereof provides for a preferential right in favour of Co-operative Societies while participating in tenders. Tenders floated by the KSEB would also be subject to the same terms. With reference to Ext.P4 representation, it is contended that the Society had expressed its willingness to undertake the work at 18.99% below the PAC which is 10% above the rate quoted by the 5th respondent and consequently going by clause 8, work should have W.P.(C).2307/2009 5 been awarded in favour of the petitioner. 4. KSEB has filed a counter affidavit wherein it had taken a stand that Ext.P1 Government Order or the price preference clause which is mentioned therein, is not applicable to the work in question. The Board refers to Ext.R2(a) Government Order (produced along with the statement filed by them) G.O.(P).No.448/2005/Fin. dated 13.5.2005. It seems that the order came to be issued pursuant to a direction issued by this Court in O.P.No.11867/03 requiring the Government to consider the wisdom of changing the policy, which provides for several concessions by way of subsidies, power tariff concessions etc., given to SSI Units. On examining the issue as directed by this Court, Government proceeded to issue the order which is mentioned therein inter alia providing that no bidder shall be exempted from EMD/bid security and the price preference of 15% which was hitherto given to the W.P.(C).2307/2009 6 small scale industrial units for purchases by the PSUs will be reduced to 5%. It is further mentioned therein that the price preference indicated in the said order shall be given to SSI Units and Central/state PSUs by the KSEB after obtaining the concurrence of the State Electricity Regulatory Commission. Learned Standing Counsel contends that Ext.P1 Government Order is no longer in force and that the price preference provided in clause 8 of Ext.P1 would not at any rate be available to the petitioner, in the matter of the tenders submitted pursuant to Ext.P3. It is further contended that admittedly petitioner did not make an earnest money deposit and since by virtue of Ext.R2(a) Government Order, no tenderer is entitled to an exemption from effecting EMD, petitioner's tender was any way liable to be rejected. It is further contended that since the difference between the rate quoted by the 5th respondent and the petitioner was more than 30%, the petitioner's tenders was W.P.(C).2307/2009 7 not liable to be accepted. 5. No counter affidavit has been filed by the awardee, the 5th respondent, nor is there any appearance for the 5th respondent, in spite of the fact that they have been served from this Court. 6. I heard learned counsel for the petitioner and the learned counsel for the KSEB. 7. The contention taken up by the Board that Ext.P1 Government Order is superceded by Ext.P2 (a) Government Order, is not impressive. Firstly, Ext.P1 Government Order is applicable only to Labour Contract Co-operative Societies. Ext.R2(a) Government Order does not refer to Ext.P1. Moreover, Ext.R2(a) Government Order deals with the modification of the price preference clause which was till then made available by the SSI Units in the matter of purchases from Public sector W.P.(C).2307/2009 8 undertakings as also the KSEB. Ext.P1 Government Order deals with the preference to be shown to the Labour Contract Co-operative Societies and clause 8 thereof deals with the procedure to be followed in the matter of awarding contracts. The order as such does not deal with any price preference in the matter of purchases to be effected by public sector undertakings. Ext.P1 Government Order is specifically applicable only to Labour Contract Societies. Ext.R2(a) Government Order deals with small scale industries. There is nothing in Ext.R2(a) either on a ex facie reading of the same or on a consideration of the subject matter of the two Government Orders to persuade this Court to come to the conclusion that Ext.P1 Government Order is either repeated by Ext.R2(a) or suitably modified as such. 8. If Ext.P1 Government Order applies, then it seems to be clear that clause 8 thereof has not W.P.(C).2307/2009 9 been followed by the KSEB. Clause 8 provides for a preference to be shown in favour of Labour Contract Societies. The procedure mentioned therein applied where a private contractor has quoted the lowest rate and a Labour Contract Co- operative Societies has also quoted. In awarding contracts in the manner mentioned therein, it is clearly provided that the work awarding authority should ascertain the willingness of the Labour Contract Society, in writing, as to whether the Society is willing to take up the work at 10% above the lowest rate. If the Society expresses its willingness, it is entitled to be awarded the contractor. If not, the work should be awarded to the lowest tenderer. 9. The Board has taken the stand that the Society did not express its willingness to be awarded the work at 10% above the lowest tender on the date of opening the tender. This is a matter in dispute. But W.P.(C).2307/2009 10 even if the stand taken by the respondents in this regard is accepted for argument, it still does not improve the situation. The Board was obliged to ascertain the willingness of the Society. The Board has no case that the Society had expressed its disinclination. Ext.P4 indicates that the Society had expressed its willingness in writing. 11. The benefit of Ext.P1 Government Order has therefore, to be given to the Societies like the petitioner's as long as the order is in force. Since the order has been adopted by the KSEB, the terms and conditions provided in Ext.P1 would be applicable to the KSEB also until it brings about revised procedure which of course it is entitled to. But it cannot take shelter under Ext.R2(a) Government Order. As I have already found, Ext.P1 has not been superceded or modified by Ext.R2(a). 12. For all these reasons, I am of the view that the W.P.(C).2307/2009 11 petitioner is entitled to the award of contract. The award of contract pursuant to Ext.P3 in favour of the 5th respondent shall therefore stand set aside. 4th respondent shall proceed to award the contract relating to the work of filling and levelling of the 66 KV Sub Station Site at East Kallada, to the petitioner at 10% above the lowest rate quoted by the tenderers who had responded to Ext.P1 notification. Writ petition is allowed as above. V.GIRI, Judge mrcs