NEW DELHI: The Supreme Court stayed the High Court's order granting permission to the Uralungal Co-operative Society to construct a seven-storey court building in Kannur. The action was taken on a petition filed by AM Muhammad Ali, a private contractor who was awarded the tender by state government for the construction. A bench headed by Justice JK Maheshwari ordered notices to be sent to the opposing parties, including the Uralungal Cooperative Society and the state government.

The private contractor told the Supreme Court that the government awarded the construction contract to him who had quoted the lowest amount. However, the high court division bench granted construction permission to the cooperative society, which quoted a higher amount. There is a 7.10 percent difference between the amounts in the tenders. Haris Beeran, the lawyer of the private contractor, stated that if he gets the contract, the government can save one crore and sixty lakh rupees. Court asked how the Uralungal society could be awarded the contract if there was such a difference in the amount. The High Court order was then stayed.

In November 1997, the state government issued an order requiring cooperative societies will be given consideration for government construction works if they had submitted quotations, even though the private contractor's quotation was for the lowest amount. The government order also said that the society can be awarded the contract for ten percent more than the amount of the contractor who has quoted the lowest amount. The order of the High Court Division Bench in the petition filed by the Uralungal Cooperative Society also pointed out this.