The court underscores the necessity for clear guidelines on calculating deductions in tender awards to safeguard public funds from arbitrary losses in the tendering process.

JUDGMENT :

NITIN JAMDAR, C.J.

1. The Petitioner has filed this Public Interest Litigation challenging the award of tenders by the Irrigation Department of the Government of Kerala, primarily on the ground that the grant of tenders has resulted in substantial loss to the State exchequer.

2. We have heard learned counsel for the parties. Two learned Special Government Pleaders have appeared, one for the Finance Department of the State, and the second for the Irrigation and Water Resources departments of the State.

3. The State of Kerala took cognisance of the fact that the storage capacity of the majority of the reservoirs in the State has reduced over the years on account of sedimentation and constituted a committee to prepare draft Standard Operating Procedures (SOP) for desiltation of the reservoirs in Kerala. The Committee prepared the draft Standard Operating Procedure (SOP), which was duly published. The draft SOP dealt with the estimation of quantities of components in the deposited sediments, the technology to be employed, environmental concerns, and the method for calling tenders for the work. In the case of outright sale of sediments, bids were to be accepted above the value of the component materials, as determined by the prevailing Local Market Rate of the Public Works Department.

4. On 6 August 2024, the Superintending Engineer, Irrigation Department, Central Circle, Ernakulam, issued three Notices Inviting Tenders, marked as Exts. P2, P3 and P4.Ext.P2 tender was for Desiltation – Upstream of Pattambi Check Dam. The location of the work was at Palakkad and the estimated cost of the work is Rs. 12,44,49,384/-. Ext.P3 tender was for Desiltation – Upstream of Koottakkadavu Regulator in Anakkara Panchayath, Palakkad District. The location of the work was at Palakkad and the estimated cost of the work is Rs. 12,72,14,926/-. Ext.P4 tender was for Desiltation – Upstream of Cheruthuruthy Check Dam in Shornoor Municipality, Palakkad District. The location of the work was at Palakkad and the estimated cost of the work is Rs. 15,53,12,832/-.

5. A complaint was submitted to the Chief Secretary stating that the highest rate quoted in the tender was Rs. 2,151.66 per m³, which is Rs. 423.24 less than the prevailing local market rate for 1 m³ of sand in Palakkad District. The complaint further alleges that this disparity would result in an estimated loss of approximately Rs. 15,46,55,011.30 to the State exchequer. Contending that the Government is losing a substantial source of revenue at a time when it is already facing serious financial constraints, the Petitioner asserts that the matter needs to be looked into. However, no cognizance was taken of the complaint. The Respondent State authorities proceeded to award the tender to Respondent No. 6. Hence, the present Public Interest Litigation has been filed.

6. According to the Petitioner, the Local Market Rate for sand in Palakkad District is Rs. 2,475/m³. The Petitioner relied upon the relevant pages of the Local Market Rates (basic rate for Palakkad) from the official website of the State Government. According to the Petitioner, the price of Rs. 2,475/m³ pertains to Zone IV-quality sand, and the Local Market Rate has never fixed pricing for Zone II-quality sand.

7. An affidavit was filed on 13 March 2025 by the Respondent No.6- tenderer seeking to justify the award of the tender in favour of Respondent No. 6. Thereafter, a counter-affidavit was filed by the Superintending Engineer on 24 March 2025, stating that the base rate had been fixed taking the Local Market Rate as Rs. 2,575/m³, as against Rs. 2,475/m³ alleged by the Petitioner. While fixing the base rate at Rs. 2,083.55/m³, the mandatory sieving charges of Rs