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CASE NO.: Appeal (civil) 665  of  2001 Special Leave Petition (civil)  15881    of  1999 Special Leave Petition (civil)  666      of  2001 Special Leave Petition (crl.)   1476     of  2000

PETITIONER: M.D.  KERALA STATE BEV.  (M & M) CORPN.  LTD.  & ANR.

       Vs.

RESPONDENT: K.M.K.  SALIM AND ORS.

DATE OF JUDGMENT:       17/01/2001

BENCH: S.N.Phukan, S.S.M.Quadri

JUDGMENT:

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     J U D G M E N T

     Syed  Shah  Mohammed  Quadri, J.   Leave  is  granted. These two appeals are between the same parties and arise out of  the  proceedings  relating  to  award  of  contract  for handling loading and unloading operations in the appellants Corporation.  They can conveniently be disposed of together. Civil  Appeal No.665 of 2001 @ S.L.P.(C) NO.15881 of 1999 is directed  against the order of a Division Bench of the  High Court  of Kerala at Ernakulam in O.P.NO.19616 of 1999  dated September  20,  1999.  Civil Appeal No.666 of 2001 @  S.L.P. (C)No.1476  of  2000  is directed against an  interim  order passed by a learned Single Judge of the High Court of Kerala at  Ernakulam on December 3, 1999 in O.P.  No.30284 of  1999 which   is   offshoot  of  the   order   impugned   in   the aforementioned Civil Appeal.  The facts giving rise to these appeals  are as follows.  The appellants invited tenders for handling  loading  and  unloading operations in  the  Kerala State  Beverages  (M  &  M)  Corporation  Liquor  Godown  in Valanjavattom, Tiruvalla on September 14, 1998.  In response to  the  said invitation for tenders, 12  persons  including respondent  Nos.1 to 3 filed tenders.  Respondent Nos.1 &  2 filed  a joint tender and quoted the lowest rates.  However, the  appellants, after negotiations, awarded the contract to respondent  No.3  at  the  rate lower than  that  quoted  by respondent  Nos.1  & 2 on October 23, 1998.  On October  26, 1998  respondent Nos.1 & 2 questioned the validity of  order of the appellant awarding the contract to respondent No.3 in the  High Court in O.P.No.20911 of 1998 which was  dismissed by  a  learned  Single Judge of that court on  November  26, 1998.   But  on  appeal  (Writ Appeal No.2692  of  1998),  a Division  Bench of the High Court set aside the order of the learned   Single  Judge  and   directed  the  appellants  to reconsider  the  tenders and pass appropriate orders  within one  month of the order;  for reporting compliance, the case

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was  directed to come up on July 23, 1999.  The writ  appeal was  thus  allowed on June 24, 1999.  The appellants  issued notice  to respondent Nos.1 to 3 and conducted interview  on July  12, 1999.  The contract was awarded to respondent No.3 by  order  issued on July 21, 1999.  It is that order  which was quashed by the Division Bench in O.P.No.19616 of 1999 by the  order,  impugned in the first- mentioned civil  appeal. By  the  said  impugned order the Managing Director  of  the first  appellant was directed to consider the tenders afresh and  pass appropriate orders within two weeks from the  date of  that order keeping in view the observations of the  High Court   in   Writ  Appeal  No.2692   of  1998.    On   fresh consideration  of the tenders, the Managing Director awarded the  contract  to respondent Nos.1 & 2 on October  1,  1999. Thereafter,  respondent Nos.1 & 2 filed O.P.NO.30284 of 1999 seeking a writ of mandamus directing the appellants to enter into  an  agreement  with  them   within  ten  days  without insisting on any licence from the District Labour Officer in terms  of award of the work.  In the said O.P.  a  direction was  sought in the above terms in C.M.P.  NO.51612 of  1999. On  December  3,  1999, a learned Single Judge of  the  High Court  issued an interim direction to the first appellant as prayed  for.  That order is the subject matter of appeal  in C.A.No.666  of  2001 @ S.L.P.(C) No.1476 of 2000.   Pursuant thereto,   respondent  Nos.1  &  2  complied  with  all  the formalities  and have been carrying on loading and unloading operations.   Dr.  Rajeev Dhawan, the learned senior counsel appearing  for the appellants, contended that the High Court ought  not  to  have  interfered   with  the  order  of  the appellants  awarding  the  contract to  respondent  No.3  on October  23, 1998.  The reasons for awarding the contract to respondent No.3, submitted the learned counsel, were neither irrelevant  nor  arbitrary within the meaning of  Wednesbury principle.   So  also,  the  High Court ought  not  to  have interfered  with the award of contract to respondent No.3 by quashing  the  order of the appellant dated June  24,  1999. The  subsequent order of the Managing Director awarding  the contract  in  favour of respondent Nos.1 & 2, was under  the threat  of  contempt.  He argued that if this Court were  to set  aside  the impugned order of the Division Bench of  the High  Court,  the award of contract in favour of  respondent Nos.1  &  2,  would consequently stand set aside.   Mr.   K. Sukumaran,   the  learned  senior   counsel  appearing   for respondent Nos.1 & 2, contended that the High Court directed fresh  consideration of the tenders of respondent Nos.1 to 3 by  the  Managing  Director of the first  appellant  and  he awarded  the contract in favour of respondent Nos.1 & 2.  As the secretary of the first appellant did not conduct himself properly  in  carrying out the directions of the High  Court dated  June  24, 1999, the Managing Director was ordered  to consider  afresh  the  question  of  awarding  tenders.   He submitted  that  after  award of contract in  their  favour, respondents  executed an agreement with the appellants, paid the  security  deposit and furnished the bank guarantee  and that  respondent No.3, the affected party, did not challenge the  order  of award of contract in their favour so this  is not  a fit case for interference by this Court under Article 136 of the Constitution.  We have considered the contentions of  the learned counsel of the parties.  We are of the  view that by the impugned order the High Court did not direct the Managing  Director  of  the  first appellant  to  award  the contract  in favour of respondent Nos.1 & 2 but ordered  him to consider afresh the competing claims of the tenderers and he,  on fresh consideration, awarded the contract in  favour of  respondent  Nos.1  &  2.  The  choice  of  awarding  the

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contract  to respondent Nos.1 and 2 is that of the  Managing Director  of  the first appellant.  Inasmuch  as  respondent Nos.1  &  2, after award of contract, complied with all  the formalities  by  entering  into  an  agreement,  paying  the security  deposit and furnishing bank guarantee, it will not be appropriate, having regard to the subsequent developments and  the facts of this case, to deal with the correctness or otherwise of the reasoning of the High Court in the impugned orders.   In  this  view of the matter,  while  leaving  the questions  of  law  open, we decline to interfere  with  the orders  under  challenge in these appeals.  The appeals  are accordingly disposed of.  No costs.