IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 28TH NOVEMBER 2011 / 7TH AGRAHAYANA 1933 WP(C).No. 16759 of 2006(T) -------------------------------------- PETITIONER(S): ---------------------- PIUS MANI, M/S.DWARAKA TOURIST HOME, PAYYANNUR, KERALA. BY SRI.K.RAMAKUMAR, SENIOR ADVOCATE RESPONDENT(S): ------------------------- 1. THE ASSISTANT DEFENCE ESTATE OFFICER, BURMA HOUSE, RAVIPURAM ROAD, KOCHI-682 016. 2. THE DIRECTOR GENERAL, EZHIMALA NAVAL ACADEMY, EZHIMALA, PAYYANNUR, KERALA. 3. THE ADDITIONAL DEFENCE ESTATE OFFICER, THE DEFENCE ESTATE OFFICER, MADRAS, CIRCLE 306, ANNA SALAI, TEEJNAMPEL, CHENNAI-600 018. 4. THE DEFENCE ESTATE OFFICER, PRINCIPAL ESTATE DIRECTORATE, HEADQUARTERS, SOUTHERN COMMAND, PUNE-411 001. BY ADV. SRI.S.KRISHNAMOORTHY, CGC SRI. AJITH KRISHNAN, ADDL.CGSC, SRI.TOJAN J.VATHIKULAM, ADDL.CGSC. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28/11/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs WP(C).No. 16759 of 2006(T) APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE NOTIFICATION DATED 04/2004 ISSUED BY R1. EXT.P2 COPY OF THE LETTER DATED 23/02/2005 BY THE PETITIONER. EXT.P3 COPY OF THE LAWYER'S NOTICE DATED 03/06/2005 SENT ON BEHALF OF THE PETITIONER. EXT.P4 COPY OF THE JUDGMENT DATED 28/03/2006 IN CONT. CASE © NO.1358/2005. EXT.P5 COPY OF THE ORDER DATED 09/09/2005 BY R4. EXT.P6 COPY OF THE ORDER DATED 10/02/2006 BY THE DIRECTOR OF DEFENCE ESTATE. EXT.P7 COPY OF THE PROCEEDINGS NOTED DOWN AT THE TIME OF HEARING ON 24/01/2006 BY THE DEFENCE ESTATE OFFICER. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.S. TO JUDGE rs S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= W.P(C) No. 16759 of 2006 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 28th day of November, 2011. J U D G M E N T By Ext.P1, the 1st respondent invited tenders for sale of various types of cut and stacked trees at the Naval Academy Project, Ezhimala under the Ministry of Defence. The petitioner submitted his bid for Rs. 3,50,000/-, which was the highest bid. As required by clause 3 of Ext.P1, the petitioner deposited the entire bid amount. The auction was held on 2.12.2004. Since no decision on the acceptance of the petitioner's tender was taken even after more than 2 ½ months, the petitioner submitted Ext.P2 request dated 23.2.2005 seeking urgent steps either to confirm the auction or to cancel the auction and refund the amount remitted by the petitioner. Still no action came from the respondents. By Ext.P3 notice dated 3.6.2005 through his advocate, the petitioner again reiterated the request in Ext.P2. Nothing happened even thereafter. The petitioner filed W.P(C) No. 19055/2005 before this Court and this Court passed the following judgment in that writ petition: “The petitioner participated in the public auction held by the respondents for sale of certain trees, cut and stacked at the Naval Academy Project, Ezhimala. Though the petitioner was the highest bidder, the tender submitted by him was not confirmed. Since several months have elapsed after the date of auction, the quality of the trees cut and stacked, has deteriorated considerably. The petitioner filed Ext.P2 representation before the 2nd respondent, praying to relieve him from the tender. Thereafter, this writ petition is filed, seeking a direction to the 2nd respondent to consider and pass orders on Ext.P2. The learned Assistant Solicitor General appearing for the respondents submitted that the competent authority to take a W.P(C) No. 16759 of 2006 -: 2 :- decision on the claim of the petitioner is the 4th respondent. Ext.P2 has already been received by the 2nd respondent, it is submitted. 2. In view of the above position, the 2nd respondent is directed to forward Ext.P2 to the 4th respondent. In that event, the 4th respondent shall take a decision on Ext.P2 in accordance with law within one month from the date of receipt of a copy of this judgment. If the 4th respondent has any objection in allowing the prayer of the petitioner, he shall be put on notice regarding the said objection and shall be heard before passing orders as directed above.” Pursuant thereto, the 4th respondent passed Ext.P5 order accepting the bid of the petitioner and directing him to deposit a sum or Rs. 35,000/-. Alleging that Ext.P5 order has not been passed in compliance with the directions in the judgment in W.P(C) No. 19055/2005 insofar as the petitioner has not been put on notice and heard as directed therein, the petitioner filed Cont. Case (C) No. 1958/2005. During the pendency of that contempt case, as per the directions in the contempt case, the petitioner was afforded an opportunity of being heard and the arguments of the petitioner were recorded. Thereafter, by Ext.P6 order dated 10.2.2006, the claim of the petitioner for refund of the amount deposited by him has been rejected. It is challenging Ext.P6, the petitioner has filed this writ petition seeking the following reliefs: “i. To call for the records leading upto Ext.P6 and quash the same by the issuance of a writ of certiorari or any other appropriate writ, order or direction. ii. To issue a writ of mandamus commanding the respondents to immediately disburse the money due to the petitioner forthwith with interest till the date of the payment.” 2. The contention of the petitioner is that as laid W.P(C) No. 16759 of 2006 -: 3 :- down by the Supreme Court in various decisions, in contractual matters, the Government is expected to take decisions fairly and reasonably. The petitioner would contend that it is only fair and reasonable that bids made by tenderers are finalised without any delay, especially when the material auctioned is likely to deteriorate by passage of time. According to the petitioner, the timber, which is put in auction, is stacked in the open in the Naval Academy, Ezhimala subjected to vagaries of nature and therefore it is likely to deteriorate by passage of time. The petitioner would submit that in this case, the earliest decision on the petitioner's request was made on 9.9.2005, almost 10 months after the auction. By that time, the timber must have deteriorated to a great extent and if the petitioner is to honour his commitment, he would suffer heavy damages insofar as as he would not get what he bid for. The situation arose only because of undue delay by the respondents in finalising the tender proceedings and the petitioner cannot be made to suffer for the delay of the respondents, is the contention raised. The petitioner would therefore contend that the petitioner is entitled to refund of the amount with interest. 3. A statement has been filed by the Central Government counsel on behalf of the respondents taking the stand that they were unable to finalise the tender proceedings since the highest offer of the petitioner was below the expected amount and therefore the matter can be finalised only after obtaining confirmation from the Government. According to them, the tender conditions do W.P(C) No. 16759 of 2006 -: 4 :- not stipulate that the tender shall be accepted within a fixed time and therefore the petitioner cannot complain of undue delay. They would further submit that the petitioner's request was either to confirm the auction or to refund the amount remitted by him. By Ext.P5, The petitioner's bid was accepted and he was directed to deposit the 10% as required under the tender conditions. The petitioner did not deposit the same and therefore it is the petitioner who has committed breach of contract and therefore the respondents are not bound to refund the amount deposited by the petitioner. 4. I have considered the rival contentions in detail. 5. The Supreme Court has, time and again, held that tender proceedings shall be fair and reasonable. [See Mahabir Autostores and others v. Indian Oil Corporation and Others, AR 1990 SC 1031]. When tenders are invited for materials, which are likely to deteriorate by passage of time, it is only fair and reasonable that the tender proceedings are finalised within a reasonable time. Here, the material put on auction is timber cut and stacked in open air. It does not require any expert opinion to conclude that timber, that too, ordinary timber unlike in the case of exotic varieties like teak, rose wood etc., would deteriorate due to passage of time if subjected to the vagaries of nature. In this case, the auction was held on 2.12.2004. The petitioner paid full amount on the same day. Since nothing happened within 2½ months, the petitioner submitted Ext.P2 submission on 23.2.2005 requesting either to confirm the sale or to refund the W.P(C) No. 16759 of 2006 -: 5 :- amount. The respondents did not do anything pursuant thereto. The petitioner issued lawyer's notice on 3.6.2005 repeating the request. Again, the respondents did not do anything. The petitioner obtained a judgment in W.P(C) No. 19055/2005 for consideration of his request. Purportedly, pursuant to the said judgment, they simply issued Ext.P5 dated 9.9.2005 confirming the sale. Only when the petitioner approached this Court with a contempt case, they, in fact, complied with Ext.P4 judgment in full. The above facts are more than sufficient to conclude that the respondents are guilty of undue delay and laches in the matter of completing the tender proceedings. Of course, as is revealed from Ext.P1, part of the timber includes teak trees. But the majority are ordinary timber, which are likely to deteriorate fast since they are exposed to sun and rain. That being so, I find considerable merit in the contention of the petitioner that because of the long delay of 10 months, the petitioner had suffered prejudice and therefore he is entitled to withdraw from his bid and seek refund of the amount deposited by him, especially when the respondents have not been able to tell me what is the damage caused to them in the matter when the delay is squarely attributable to them and them alone. I am of opinion that the Government cannot act like a Shylock in the matter of sale of timber as done in this case. They are also unable to tell me what is the damage suffered by them on account of any conduct attributable to the petitioner. On the other hand, the petitioner has sufficiently proved that on account of the delay and laches on the part of the respondents, the W.P(C) No. 16759 of 2006 -: 6 :- petitioner has been seriously prejudiced. In fact, in this case, the petitioner has suffered loss because of the delay and laches on the part of the respondents. He was deprived of the use of his money for ten months and he is not likely to get what he bid for by paying that money, in the very same form obtaining at the time of the bid. In the said circumstances, I am of opinion that because of the delay on the part of the respondents in accepting his bid, the petitioner is entitled to withdraw from his offer. If at all anybody is to be blamed, it is the respondents themselves. Therefore, I am satisfied that the petitioner is entitled to refund of the amount deposited by him insofar as the respondents have not concluded the tender proceedings within any reasonable period. Accordingly, the writ petition is allowed. Ext.P6 is quashed. The respondents are directed to refund to the petitioner the amount of Rs. 3,50,000/- deposited by the petitioner within one month from the date of receipt of a copy of this judgment. Sd/- S. Siri Jagan, Judge. Tds/