IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 7412 of 2009(V)
1. N.ASHRAF,S/O.IMBICHIKOYA,AGED 47 YEARS,
... Petitioner
Vs
1. KALPATTA MUNICIPALITY, OFFICE OF
... Respondent
2. THE STATE OF KERALA,REPRESENTED BY ITS
For Petitioner :SRI.K.M.FIROZ
For Respondent :SRI.JOE JOSEPH KOCHIKUNNEL
The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
Dated :25/05/2009
O R D E R
THOTTATHIL B.RADHAKRISHNAN, J.
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W.P(C).No.7412 OF 2009
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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
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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
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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.
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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.
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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.