Kerala - Kochi   

GIDA's cancellation of tender for sale of reclaimed land quashed

Staff Reporter

`Exemption order should have preceded confirmation letter'

KOCHI: The Kerala High Court, on Tuesday, quashed the Goshree Islands Development Authority's (GIDA) cancellation of the tender for the sale of reclaimed land on Marine Drive confirmed in favour of K. Venugopalan Nair and his concerns, such as Ansu Enterprises and Hotel Venus International.

Justice K. Balakrishnan Nair also directed GIDA to issue a fresh confirmation letter and a pro forma for bank guarantee in tune with the tender conditions to the petitioners within seven days.

The court issued the directions while allowing a writ petition filed by Mr. Nair and his concerns.

The tenders were cancelled on the ground of violation of Clause 10 of the tender conditions which stipulated that a bank guarantee for 20 per cent of the bid amounts should be furnished within 180 days of the bids being accepted. The petitioners said that they could not provide the bank guarantees because the Government had not given them exemption from the provisions of the Kerala Land Reform Act.

Land ceiling

The land put up for sale measure more than the extent of land a person can hold under the Act. Under the provisions of the land ceiling law, a person could hold only six hectares of land. The petitioners pointed out that at a pre-bid meeting, the secretary of GIDA had promised that the Government would exempt the land from the Act. As the secretary failed to get it done, the petitioners did not get financial assistance from the bank, and they could not raise the required amount.

Allowing the writ petitions, the court said that going by Section 52 of the Contract Act, GIDA should have implemented the promise held out at the pre-bid meeting. The exemption notification should have been issued by March 30. The court pointed out that the notification on exemption was issued on May 20.

The court said fair play demanded that GIDA should not have issued the confirmation letter before the exemption order was obtained. The court said the authority could not compel the petitioners to "make a leap in the dark." It was bound to "illuminate the path" by providing the exemption notification.

In fact, GIDA had promised to get the notification issued within a few days, if not within a few weeks. The action of GIDA was not just and proper. The court observed that the stakes involved were high.

By providing the bank guarantees before getting the exemption order, the petitioners would be "burning its boat." Therefore, the petitioners were entitled to insist on exemption order before providing the bank guarantee. The court also dismissed the contention of GIDA and other respondents that the exemption order could be provided only when the sale deed was executed.

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