IMPORTANT POINT
Selling through auction waste paper/used paper generated in the Government offices in Kerala, cannot be said to be one causing an appreciable adverse effect on competition within India. Any agreements entered into between the Stationery Controller and contractors for sale/purchase of waste paper/used paper cannot be described as one directly or indirectly determining purchase or sale price in identical or similar trade of goods

JUDGMENT :

Petitioners in all these writ petitions are doing business in used papers. They buy old and used papers and sell it as raw materials for paper recycling industries. They have approached this Court aggrieved by conditions in the e-tender notification No.1308/D1/2019/Stationery dated 20.10.2019 issued by the Stationery Controller, Stationery Department, Government of Kerala.

2. Clause 11 of the said e-tender notification No.1308/D1/2019/Stationery dated 20.10.2019 issued by the Stationery Controller (hereinafter referred to as ‘the Notification’ for short) provides that tenders quoting price below the Government approved market rate would not be approved. Those tenders quoting up to 30% above the current market rate will be treated as competitive bids and tenders exceeding the said limit will be treated as abnormal prices and would be rejected.

3. The contention of the petitioners is that there cannot be a ceiling limit to be fixed in a process of competitive bidding. Competitive bidding means persons who are offering more competitive rates will be selected as successful bidders. If ceiling limit is fixed, all persons participating in the tender would be quoting equal amount up to the ceiling limit. Such quotes cannot be treated as competitive bids.

4. The petitioners would further contend that the said Clause No.11 would cause or is likely to cause an appreciable adverse effect on competition. It is therefore void, offending the provisions contained in the Competition Act, 2002. Though the respondents would contend that Clause 11 is intended to avoid unhealthy competition, the condition in effect is to bid in accordance with the rates published for a different period. The Notification was published in October, 2019. At that time, the published rates were for the month from July, 2019 to September, 2019.

5. Petitioners would further contend that the district wise rates of papers made available by the respondents to this Court on 15.01.2021, were not available at the time of Ext.P1 Notification. There was no publication of market rate fixed by the Government. The petitioners therefore could not have quoted rates as stipulated in Clause 11 of the Notification.

6. Quoting the rates published for items, the ceiling limit and rate selected in the tender proceedings, the petitioners argued that the rates selected by the respondents for award of contracts, are not the rates within the ceiling limit of 30% added to the current market rate. The selected rates are 2 to 3 times higher than the notified rates. Furthermore, the selected rates are not the highest rates quoted. In short, contractors who have been selected are not the contractors who have quoted within the ceiling limit. Nor are they the persons who have quoted the highest rates. The proceedings pursuant to the said Notification are therefore highly illegal, arbitrary and unsustainable, contended the petitioners.

7. The Controller of Stationery resisted the writ petitions filing counter affidavit. The Stationery Controller stated that tenders were awarded to those bidders who had quoted acceptable rates as per the tender Company condition in Clause 11 of the Notification. According to the Stationery Controller, the market rate for various waste paper items was published in the e-tender site of Government of Kerala and in the website of Stationery Department.

8. While publishing the Notification, these market rates were concluded based on the average rates for various waste paper items published by the Economic and Statistics Department of the Government of Kerala, for the period from July, 2019 to September, 2019. The Stationary Controller further stated that a tenderer can quote a rate not below the market rate fixed for a particular kind of waste paper item. He can quote a maximum competitive rate up to 30% above the market rate. Quoted rate is not the exclusive factor in awarding a tender. History of performance of contractors is a decisive factor. The contract is not int