No person can claim fundamental right to carry on business with State or its instrumentalities: Kerala HC

Read Judgment: Shyam Raj P vs. State of Kerala & Ors.

LE Staff

Kochi, August 13, 2021: The Kerala High Court (Ernakulam Bench) has ruled that if a tenderer does not show correctly the applicable taxes in the tender, no further claim can be raised by him at a later stage under any circumstances.

While dismissing the petition, a Single Bench of Justice P.B. Suresh Kumar observed that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding a contract, interference by Court is very restrictive since no person can claim any fundamental right to carry on business with the State or its instrumentalities. 

Justice Kumar said that there is no illegality in the conduct of the Kerala Mineral & Metals Ltd (second respondent) in ignoring the omission on the part of the B. Sundaran (fourth respondent) in affixing his signature in the declaration form uploaded by him along with the tender documents. 

The observation came in reference to a petition filed by the proprietor of Skillderz Developers, a participant in the tender invited by KMML, challenging the award of tender to one of the respondents, who allegedly submitted their quote without signing the declaration form. 

The dispute arose when the e-tenders invited by Govt. of Kerala Undertaking (second respondent) for mechanized collection, loading, transportation and supply of mineral sand, was awarded to fourth respondent. 

In the petition, it was also canvassed the fourth respondent had also quoted the wrong GST rate of 9% in contravention to prevailing rate of 18%. 

After hearing the contention claiming award of tender, Justice Kumar observed from a reading of the document inviting the tender, that there was no provision in the tender notice to the effect that the omission to put signature of the tenderer in one or two pages of the tender document would result in rejection of the tender. 

Justice Kumar also found that the provision in the tender notice is that if the rate of applicable taxes is shown incorrectly in the tender document, the financial burden arising from the same shall be borne by the tenderer.

The High Court opined that the second respondent was fully within its discretion in ignoring the said defect, especially when it was pointed out on behalf of the second respondent that had they noticed the said defect, they would have certainly permitted the fourth respondent to cure the same by uploading another duly signed declaration form.  

Distinguished between essential conditions of eligibility and ancillary/subsidiary conditions in so far as tender notice is concerned, the High Court concluded that the authority issuing the tender can deviate from insisting upon the strict literal compliance of the condition, in appropriate cases.