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2026 DAILYLAW 690 (KER)

M. Rajkumar v. State of Kerala Represented By The Secretary, Public Works Department

2026-04-07

Ziyad Rahman A A

body2026
JUDGMENT : ZIYAD RAHMAN A.A., J. In all the Writ Petitions, the dispute is with respect to the tender process initiated by Kerala Road Fund Board for the work notified as “Laning of Vazhayila – Pazhakutty – Kacherinada 11th Stone Road in Thiruvananthapuram District – Reach 2 – KELTRON Junction to Valikode Junction – Chainage 3/940 to 8/100”. The petitioner in W.P(C) No.307/2026, 371/2026 and 2446/2026 was earlier issued with a letter of acceptance, based on the original tender notification, issued by the 2nd respondent. Ext.P1 is the letter of acceptance dated 07.01.2025. As per the terms and conditions of the tender notification, the petitioner in the aforesaid Writ Petitions was supposed execute the agreement within 28 working days from the date of receipt of the letter of acceptance and also to deposit an amount equal to 5% of the contract value towards performance guarantee. An additional performance guarantee of Rs.5,77,58,263/- (Rupees five crore seventy seven lakhs, fifty eight thousand two hundred and sixty three only) was also to be deposited. 2. However, the petitioner in the aforesaid Writ Petitions could not execute the agreement and furnish performance guarantee as well as the additional performance guarantee, as required. It is the case of the petitioner that, although the petitioner produced the stamp paper to execute the agreement, the solvency certificate could not be furnished by the petitioner and hence the petitioner required enlargement of time. 3. The petitioner also faced some difficulties in obtaining bank guarantee from Kerala Finance Corporation as well. According to the petitioner, despite the request made by the petitioner seeking enlargement of time, Ext.P6 in WP(C) No.307/2026 was issued on 20.12.2025, cancelling the award of the work in favour of the petitioner and rearranging the work at the risk and cost of the petitioner. The said order was challenged by filing WP(C) No.307/2026. One of the grounds raised by the petitioner is that one of the contributory factors for the delay, was the failure on the part of KFC to provide the bank guarantee, and Ext.P5 issued by KFC was also relied on to substantiate the same. 4. This Court admitted the said Writ Petition and passed an order stating that the tender proceedings based on Ext.P7 can go on; however, the awarding of the tender based on the same shall be subject to the final outcome of this Writ Petition. 4. This Court admitted the said Writ Petition and passed an order stating that the tender proceedings based on Ext.P7 can go on; however, the awarding of the tender based on the same shall be subject to the final outcome of this Writ Petition. Later, the petitioner submitted another bid in response to Ext.P7 produced in WP(C) No.307/2026, which is the re-tender notification. In the said tender process, the petitioner was disqualified on the ground that the petitioner failed to execute the agreement in the first tender process and also failed to furnish the performance guarantee and additional performance guarantee. That was challenged in WP(C) No.2446/2026. In the said Writ Petition, this Court passed an interim order staying the finalisation of the tender process. 5. WP(C) No.6634/2026 is filed by another person who happened to be the L1 in re-tender notification produced as Ext.P7 in WP(C) No.307/2026. The reliefs sought by the petitioner therein are to direct the 2 nd respondent to permit the petitioner to execute the agreement by furnishing a performance guarantee at the rate of 3% instead of 5%. This relief was sought in view of Exts.P3, P4 and P5 Government Orders. 6. I have heard the learned counsel for the petitioner in WP(C) No.307/2026 and WP(C) No.2446/2026, the learned counsel appearing for the petitioner in WP(C) No.6634/2026 and the learned Standing counsel for the Kerala Road Fund Board. 7. The specific contention raised by the petitioner in WP(C) No.307/2026 and WP(C) No.2446/2026 relates to the disqualification of the petitioner in the tender process. In this regard, it is to be noted that the relevant clause applicable is clause 6.2 in Ext.R2(a) which contains the tender conditions. The said clause reads as follows: “6.2. In the eventuality of failure on the part of the lowest successful Bidder to produce the original documents, submit the Performance Guarantee or enter into agreement with the Agreement Authority within the specified time limit, subjected to clause 3.6.6 of this section, the Bidder shall be debarred in future from participating in all the Government Bids for three years and penal action by the competent authority will be recommended. In such cases, the work shall be re-tendered.” 8. In such cases, the work shall be re-tendered.” 8. As per the same, in case of failure on the part of the lowest successful Bidder to produce the original documents, submit the performance guarantee or enter into the agreement within the specified time limit, the said Bidder shall be debarred in future from participating in all the Government bids for three years and penal action by the competent authority will be recommended. Of course, it is stated that the said proceedings shall be subject to clause 3.6.6 of the said document. Clause 3.6.6 reads as follows: “3.6.6. The Bid Security may be forfeited: a) if the Bidder withdraws the Bid after Bid opening during the period of Bid validity including extended period of validity; or b) if any modification is effected to the tender documents or c) in the case of a successful Bidder, if the Bidder fails within the specified time limit to: i. sign the Agreement; or ii. Furnish the required Performance Guarantee or iii.If the Bidder fails to convince the Employer about the reasonability of his unbalanced bid prices for any individual item or items of his price bid.” 9. As per sub-clause (c) of clause 3.6.6, in case of failure on the part of the bidder to sign the agreement or furnish the required performance guarantee, the work shall be rearranged at the risk and cost of the selected bidder. In this case, the work is admittedly rearranged by issuing Ext.P7 re-tender notification in WP(C) No.307/2026, only because of the reason that, the petitioner in the said Writ Petition failed to execute the agreement and furnish the performance guarantee and additional performance guarantee in time. Of course, it is true that the petitioner therein has a case that a request was made seeking more time, as the petitioner could not comply with the condition despite all earnest efforts. It was also pointed out, by placing reliance upon Ext.P5 in WP(C) No.307/2026, that there occurred delay on part of the Kerala Financial Corporation in providing the bank guarantee so as to enable the petitioner to execute the agreement by fulfilling the requirement of furnishing performance guarantee as well as additional performance guarantee. 10. However, I am of the view that, as far as those reasons are concerned, under no circumstances can that be treated as justifiable grounds to seek the reliefs sought in the Writ Petition. 10. However, I am of the view that, as far as those reasons are concerned, under no circumstances can that be treated as justifiable grounds to seek the reliefs sought in the Writ Petition. This is because, as far as the Kerala Road Fund Board is concerned, they were bound to ensure, in the light of the tender documents, that an agreement is entered into after furnishing performance guarantee as well as additional performance guarantee by the lowest bidder, within a specified time limit after issuance of the letter of acceptance. The maximum extension that can be granted for executing the necessary documents in this regard is also specified in the said tender documents, and in this case, that extended time was also granted to the petitioner. Despite the above, the petitioner could not fulfill the above obligation. The reason highlighted by the petitioner, is to the effect that it was due to the delay on the part of the Kerala Financial Corporation, the petitioner could not comply with the said condition. This cannot be a reason for the Kerala Road Fund Board to grant more time. The terms and conditions in the tender documents were already notified much earlier, and the petitioner in WP(C) No.307/2026 had submitted the bid after fully conscious of the terms and conditions and the requirements mentioned therein, including the necessity to execute the documents within the time frame contemplated therein. Therefore, if at all there was any explanation for the delay on the part of the petitioner, that cannot be a reason that precludes the tendering authority in proceeding with the tender process by cancelling the tender and rearranging the work. Therefore, as far as Ext.P6 order is concerned, I do not find any justifiable reason to interfere with the decision cancelling the tender process and rearranging the work. 11. When it comes to the challenge raised in WP(C) No.2446/2026, it is with regard to the disqualification of the petitioner in the re-tender process. The tender submitted by the petitioner was rejected on the ground that, the petitioner failed to execute necessary documents within the specified time in the first tender notification. 11. When it comes to the challenge raised in WP(C) No.2446/2026, it is with regard to the disqualification of the petitioner in the re-tender process. The tender submitted by the petitioner was rejected on the ground that, the petitioner failed to execute necessary documents within the specified time in the first tender notification. Even though various contentions have been raised by the petitioner, including that no order blacklisting the petitioner has been passed as of now and therefore no disqualification from participating in the tender could be attracted, I am of the view that, as far as the re-tender notification, which is the subject matter in this Writ Petition, is concerned, those contentions cannot be accepted. This is particularly because, the re-tender itself was necessitated on account of the lapses on the part of the petitioner in complying with the obligations under the tender documents, namely, to execute necessary documents within the specified time. In the light of clause 6.2 and clause 3.6.6 in Ext.R2(a), the consequences in relation to the tender process in which the failure of the petitioner occurred, are already attracted, and no separate order blacklisting the petitioner is required, at least for the purpose of the said re-tender process. This is because, on carefully going through the provisions contained in the aforesaid clauses, the disqualification is automatic. Clause 6.2 read with 3.6.6(c), specifically provides that, in cases where the bidder fails to sign the agreement or furnish the required performance guarantee within the time limit, the work shall be rearranged at the risk and cost of the selected bidder. Therefore, the rearrangement of the work is a natural consequence flowing from the lapses on the part of the petitioner in fulfilling the obligation to execute necessary documents within the time specified above. Therefore, I do not find any justifiable reason to interfere in the re-tendering process. 12. When it comes to the disqualification of the petitioner from participating in the re-tender also, I do not find any justifiable reason in the claim of the petitioner. As mentioned above, since the re-tender itself was necessitated in view of the lapses on the part of the petitioner in fulfilling the obligations, permitting the petitioner to participate in the re-tender process would defeat the very purpose of the clauses for rearrangement of the work. 13. As mentioned above, since the re-tender itself was necessitated in view of the lapses on the part of the petitioner in fulfilling the obligations, permitting the petitioner to participate in the re-tender process would defeat the very purpose of the clauses for rearrangement of the work. 13. In such circumstances, I do not find any ground to grant the relief sought in WP(C) No.307/2026 and WP(C) No.2446/2026. However, it is clarified that these observations and findings are only in respect of the re-tender process by way of rearranging the work. Under no circumstances shall this be treated as an order blacklisting the petitioner for all the tenders in future, unless a separate order in this regard is passed by the competent authority after notice to the petitioner. Moreover, recovery of any amount due towards risk and cost is also a matter which has to be finalised after issuing notice to the petitioner. This would mean that, merely because these Writ Petitions are dismissed, the respondents would not be entitled to recover amounts towards risk and cost from the petitioner. For the said purpose, they will have to issue notice to the petitioner and finalize the same after giving the petitioner an opportunity of being heard. 14. When it comes to the relief sought in WP(C) No.6634 of 2026, which is submitted by the successful bidder in the re-tender process, the same is for an opportunity to furnish performance guarantee for an amount equal to 3% of the contract value instead of 5% as specified in the tender documents. The said relief is sought based on Exts.P3, P4 and P5 Government Orders. However, on carefully going through the aforesaid Government Orders, it can be seen that, the said relaxation in the amount of performance guarantee was provided by the Government only for a limited period, and the said period expired on 31.03.2024. It is true that in this case administrative sanction for the work was granted before 31.03.2024. However, none of the aforesaid Government Orders provide that, merely because the administrative sanction was granted before the cut-off date, the bidder would be entitled to furnish performance guarantee at reduced rates. It is discernible from the aforesaid Government Orders that the said facility was provided taking note of the difficulties owing to the Covid-19 pandemic, and now the Government has decided not to extend it beyond 31.03.2024. It is discernible from the aforesaid Government Orders that the said facility was provided taking note of the difficulties owing to the Covid-19 pandemic, and now the Government has decided not to extend it beyond 31.03.2024. In Ext.P4, it is specifically stipulated that the Government Order is made applicable to all new tenders as well as works which have been tendered and awarded but agreements have not been signed by the winning bidder. In this case, the tender notification itself was issued after 31.03.2024 and therefore, under no circumstances can the petitioner in WP(C) No.6634 of 2026 claim the benefit of reduced rate for furnishing the performance guarantee. 15. In the light of the above observations, WP(C) No.307/2026 and WP(C) No.2446/2026 are disposed of by holding that there is no illegality in issuing Ext.P7 re-tender notification in WP(C) No.307/2026 and the petitioner does not have any vested right to participate in the said re-tender process. However, it is clarified that the fact that the work is rearranged, by itself will not enable the official respondents to realize amounts from the petitioner therein towards risk and cost or to blacklist the petitioner for any other contracts, without issuing notice to him and giving the petitioner an opportunity of being heard. WP(C) No.6634 of 2026 is disposed of holding that the petitioner is liable to furnish the performance guarantee at the rate of 5% of the total contract value. Since the finalisation of the tender was stayed in WP(C) No.2446/2026, the petitioner is granted two weeks’ time from the date of receipt of copy of this judgment, to furnish the performance guarantee and additional performance guarantee as per the terms and conditions in the tender documents.