Review tender issuing methodology to prevent loss to state exchequer: Kerala HC to chief secy

Kochi, Nov 27 The Kerala High Court on Thursday said the chief secretary needs to review the methodology by which tenders are issued by the government in order to remove all possible loopholes that could cause a loss to the public exchequer.

A bench of Chief Justice Nitin Jamdar and Justice Syam Kumar V M issued the direction while disposing of a public interest litigation (PIL) which claimed that tenders awarded by the Irrigation Department for desilting reservoirs of the state were causing substantial loss to the public exchequer.

The petitioner had contended in his PIL that the rate quoted in the tenders, issued in 2024, for the desilting of three dams in Palakkad district was much lower than the local market rate and would result in a loss of over Rs 15 crore for the state exchequer.

The petitioner, Shaji PM, a resident of Palakkad district, claimed that he had initially complained to the chief secretary regarding the matter, but as there was no response, he had filed the PIL.

The Irrigation Department had contended in court that the tender amount was below the local market rate due to the deduction of sieving charges which was mandatory.

Later, the Finance Department told the court that there were irregularities in the award of tender and the same may be cancelled and fresh ones may be invited by duly modifying the standard operation procedures (SOP) to avoid any possible loss to the public exchequer.

After hearing all sides and perusing the documents before it, the bench observed that the tender was issued below the local market rate which was "effectively reduced through the application of sieving charge deductions".

"No specific guidelines or policy have been placed before us regarding the manner in which sieving charges can be deducted. Granting unguided discretion to the authority could result in a substantial loss to the public exchequer; in the present case, according to the petitioner, to the tune of approximately Rs 15 crore," the bench noted.

It further pointed out that directions issued by it from time to time to place the relevant details on record were not fully complied with by the Irrigation Department and the Water Resources Department.

The bench said that it was only after the Finance Department had examined the issue of a potential loss to the public exchequer that various relevant details were subsequently placed on record before the court.

"Accordingly, we are of the view that the intervention of the chief secretary is necessary, not only to examine this specific tender, but also to review the methodology by which tenders are issued, so as to remove all possible loopholes and lacunae that may result in undue loss to the public exchequer," it said.

The court directed that the files of the proceedings, including all papers and affidavits filed in the present petition, be placed before the chief secretary of the Government of Kerala.

It further directed that the chief secretary shall take necessary decisions regarding the issues raised by the Finance Department concerning the tenders issued for desilting of the dams.

The court said that the chief secretary shall "also determine whether any changes or corrections are required in the SOP for issuing tenders, particularly with respect to the concept of sieving charges and other deductions".

"The file shall be placed before the chief secretary of the state within two weeks. The chief secretary will take the appropriate steps within four weeks thereafter," the bench said and disposed of the PIL.