N KUNHIRAMAN Vs. STATE OF KERALA

JUDGEMENT

(1.) Acceptance of a tender submitted by fifth respondent in preference to the tender submitted by petitioner in OP. 12550/91, by third respondent Municipal Council, is challenged in these writ petitions. O.P. 12550/91 is filed by the unsuccessful tenderer, while OP 12253/91 is by a Councillor of third respondent Municipality.

(2.) Tenders were invited by third respondent for construction of a shopping complex, from 'pre-qualified tenderers'. Later, open tenders were invited and petitioner, fifth respondent and others submitted tenders. Petitioner in OP 12550/91 was the lowest tenderer, but the tender of fifth respondent was accepted, at an additional cost of Rs. 1.2 lakhs. According to the petitioners, though R.8 of the Kerala Municipalities (Public Works and Supply) Rules, 1962, called the Rules' hereinafter, enables acceptance of a higher tender under certain circumstances, the circumstances of the case do not justify such a course. Fifth respondent is not a suitable person to be chosen either, according to them.

(3.) The question to be considered is whether third respondent acted in an arbitrary manner. It is settled law that a public authority cannot act arbitrarily even in the matter of awarding contracts, or distributing largesse. There is a public element in all its activities and it must conform to the mandates of Art.14 and observe tenets of equality and principles of fair action. It has been so held in the International Airport Authority's case ( AIR 1979 SC 1628 ). Harminder Singh Arora v. Union of India ( 1986 (3) SCC 247 ), M/s. Dwarka Das Marfatia & Sons v. Board of Trustees of the Port of Bombay ( 1989 (3) SCC 293 ) and G.B. Mahajan and Others v. Jalgaon Municipal Council and Others ( 1991 (3) SCC 91 ) and in a catena of other authorities.