Karnataka High Court
M/S Logisys vs Vice Chancellor on 10 January, 2017
Author: Ashok B.Hinchigeri
Bench: Ashok B. Hinchigeri
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF JANUARY 2017
BEFORE
THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI
WRIT PETITION No.56923 OF 2016(GM-TEN)
BETWEEN :
M/s.LOGISYS,
2549, "Anugraha",
17th Main, 28th Cross,
Banashankari 2nd Stage,
Bengaluru - 560 070,
Represented by its Proprietor
Sri H.N.Ramesh. ... Petitioner
(By Sri Padmanabha V. Mahale, Senior Advocate for
Sri Naveed Ahmed, Advocate)
AND:
1. Vice Chancellor,
Rajiv Gandhi University
Of Health Sciences,
4th 'T' Block, Jayanagar,
Bangalore - 560 041.
2. Registrar,
Rajiv Gandhi University
Of Health Sciences,
4th 'T' Block, Jayanagar,
Bangalore - 560 041. ...Respondents
(By Sri N.K.Ramesh, Advocate for R2)
2
This writ petition is filed under Articles 226 and 227 of the
Constitution of India praying to quash the impugned tender
notification dated 14.10.2016 published in Prajavani on
15.10.2016, issued by the R2 at Annexure-G and etc.
This writ petition, coming on for preliminary hearing, this
day, the Court made the following:
ORDER
The petitioner has called into question the respondent's tender notification, dated 14.10.2016 (Annexure-G) for the implementation of examination management and electronic answer scripts evaluation system.
2. Sri Mahale, the learned Senior Counsel appearing for Sri Naveed Ahmed for the petitioner submits that as the value of the procurement exceeds Rs.10 Crores, the Tender Inviting Authority ought to have published the tender in the Indian Trade Journal as required by Rule 10 of the Karnataka Transparency in Public Procurements Rules, 2000 ( 'Transparency Rules' for short). He submits that the respondents cannot resort to e- procurement in the absence of any notification under Section 18- A(2) of the Karnataka Transparency in Public Procurements Act, 1999 ( 'Transparency Act' for short). He submits that the notification, dated 09.10.2012 issued under Section 18-A(2) of 3 the Transparency Act does not include the respondents' procurement entity.
4. The learned Senior Counsel submits that the tender specifications are also made to oust the petitioner and to enable some other party to get the tender. He takes serious exception to the onerous provisions contained in Clauses 2.1.8, 2.1.9, 2.1.10 and 2.1.11. They are extracted hereinbelow:
"2.1.8 The Bidder or consortium partner should be a National Level IT/Network Solution Provider/SI and in operation for the last five years as on 31st March 2016 in successful development/System Integration/customization and implementation of large IT based infrastructure, information processing and management systems and solutions.
2.1.9 The prime bidder must have annual turnover from IT related services averaged over the last three financial years, more than Indian Rs.100 crores (rupees one hundred crores). CA certificate, certified audited copies of balance sheets, profit and loss accounts, annual reports of last three financial years (upto 31st March 2016) should be enclosed.4
2.1.10 The prime bidder must have positive net worth of Rs.50 crores (rupees fifty crores) in last financial year.
2.1.11 The prime bidder must have good understanding of Government Domain. The prime bidder must have been involved and successfully completed at least two assignments of providing similar services (setting up of Data Centre Servers, Desktop, RDBMS, Operating systems, WAN and Data digitization) to Government organization/PSU's. The value of each of the assignment on turn-key basis should be at least Rs.25 crores (rupees twenty five crores). Prime Bidder should have successfully completed such said services to any Government organization/PSU at 10 or more locations. The bidder should attach copies of the customer purchase orders/contracts along with the completion certificates of relevant assignments."
5. He submits that similar arbitrary terms and conditions of the tender notification, dated 28.03.2014 were challenged by the petitioner by filing W.P.No.18657/2014. The said writ petition was disposed of recording the submission made on behalf of the respondent's learned counsel that if the petitioner files the representation on modifying certain terms and 5 conditions of the tender notification in two days' time, the same would be considered by the respondents in accordance with law. This Court further directed that the respondents shall not precipitate the crisis until such time that the petitioner's representation is disposed of.
6. He submits that pursuant thereto, the petitioner submitted his representation on 07.07.2014 (Annexure-F). He brings to my notice the seal of the receiving section and the signature of the receiver for having received the said representation. When the representation did not evoke any response from the respondents, the petitioner also caused the issuance of the legal notice, dated 17.10.2016 (Annexure-H). He submits that the respondents sent the reply, dated 18.10.2016 (Annexure-J) stating that the 'alleged representation' is not received. The petitioner's learned counsel sent one more copy of the representation which is at Annexure- K, dated 24.10.2016. He also brings to my notice the respondent's letter, dated 11.8.2014 in which there is reference to the petitioner's representation, dated 07.07.2014. 6
7. Sri N.K.Ramesh, learned counsel for the respondent submits that the need to publish the tender in the Indian Trade Journal was prescribed by Rule 10 of Transparency Rules, which have come into force with effect from 24.10.2000. Six years thereafter, Chapter 2-A providing for e-procurement was inserted into the Transparency Act with effect from 27.11.2006. Therefore, the putting of the tender notification on e- procurement platform is worldwide; it is accessible to everyone all over the world. With the introduction of Section 18-A, the need to publish the tender notification in the Indian Trade Journal has spent itself out.
8. Sri Ramesh submits that the notification, dated 09.10.2012 states that all procurement entities in Karnataka shall procure their own procurements through e-procurement platform, if the value of the work exceeds Rs.5 lakhs, with effect from 03.12.2012.
9. He submits that the petitioner's system has been mal- functioning. Further, he submits that a criminal complaint came to be filed against the petitioner, as it has committed serious irregularities in the examinations. He submits that even the 7 black-listing proceedings were initiated against the petitioner. He submits that the petitioner tried to favour one Kum.Harshita, a student of first year M.B.B.S Course and thereby committed mal- practice in ensuring her getting through the examination.
10. He submits that some terms and conditions of the impugned tender notification are modified based on the deliberations in the pre-bid meetings. E.M.D. amount is reduced from Rs.50 lakhs to Rs.25 lakhs. Annual turnover is reduced from Rs.100 crores to Rs.50 crores.
11. He submits that the earlier tender notification is not acted upon at all; it is redundant. He asserts that the petitioner has not submitted any representation pursuant to this Court's order, dated 03.07.2014 (Annexure-E). On being asked as to what is the outcome of the black-listing proceedings, he submits, on instructions, that the black-listing proceedings came to be dropped.
12. Sri Naveed Ahmed, learned counsel for the petitioner, in the course of his rejoinder submissions, brings to my notice the respondent's letter, dated 29.10.2014 containing the decision not to black-list the petitioner.
8
13. The submissions of the learned counsel have received my thoughtful consideration. The first question that falls for my consideration is whether the impugned tender notification suffers from any legal infirmity and whether it is liable to be quashed on account of its non-publishing in the Indian Trade Journal? My emphatic answer is in the negative.
14. The Rule requiring the Tender Inviting Authority to invite the tender by publishing it in the Indian Trade Journal has virtually become redundant in view of the subsequent insertion of Chapter 2-A dealing with E-procurement into the Statute. Once the tender is notified on e-procurement platform, it is accessible to every eligible and aspiring tender globally. Therefore I have no hesitation in holding that the non-publishing the tender in the Indian Trade Journal does not vitiate the impugned tender proceedings in any way.
15. The second question that falls for my consideration is whether it was open to the respondent Rajiv Gandhi University of Health Sciences to resort to e-procurement. The notification, dated 09.10.2012 issued by the Government makes it very clear that in supersession of all notifications specified in the Annexure 9 thereto the Government of Karnataka specifies that all the procurement entities shall procure their procurement only through e-procurement platform. It has full application for the respondent University also.
16. The third question that falls for my consideration is whether certain terms and conditions of the tender notification can be held to be unreasonable? To answer this question, I may usefully refer to the Apex Court's decision reported in AIR INDIA vs. COCHIN INTERNATIONAL AIRPORT reported in (2000) 2 SCC 617 wherein it is held that the State can fix its own terms and conditions to a tender and that is not open to judicial scrutiny. The State is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation.
17. The Apex Court in the case of MICHIGAN RUBBER (INDIA) LIMITED vs. STATE OF KARNATAKA AND OTHERS reported in (2012) 8 SCC 216 has this to say in para Nos.23
(c) & (d) :
"(c) In the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State 10 authorities unless the action of the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work."
18. The courts do not substitute their wisdom for the wisdom of the executive or experts in the field. On the ground that the tender conditions would have been more scientific or more liberal, this Court's interference is not warranted. The challenge to the terms and conditions extracted supra (which are however modified to some extent) is negatived.
19. The last and the fourth question is whether the respondents have acted in the letter and spirit of this Court's order, dated 03.07.2014 (Annexure-E) passed in W.P.No.18657/2014. The relevant portion of the said order is extracted hereinbelow:
"2. Sri Sandesh J.Chouta, the learned counsel for the respondents makes the fair submission, based on instructions, that if the petitioner submits a 11 representation on modifying certain terms and conditions of the tender notification, the same would be considered by the respondents in accordance with law. He further submits that if the petitioner files the representation within two days, the respondents would not precipitate the crisis till the orders are passed on the petitioner's anticipated representation.
3. Sri Padmanabha V. Mahale, the learned Senior Counsel appearing for Sri Naveed Ahmed for the petitioner submits that he would advise his client to file the representation within two days. He submits that if the respondents' order goes adverse to the interest of the petitioner, it should be open to the petitioner to approach this Court again.
4. Recording the submissions of the learned advocates, I dispose of this petition with the following directions:
(i) The petitioner shall submit the representation for altering the conditions and terms of the tender notification on or before 7.7.2014.
(ii) The respondents shall consider the petitioner's representation in accordance with law. It is made clear that no opinion whatsoever is expressed on the merits of the petitioner's version.12
(iii) If the petitioner fails to submit the representation on or before 7.7.2014, then there would not be any legal impediment for the respondents to act on the impugned tender notification.
(iv) If the petitioner files the representation within 7.7.2014, the same shall be considered by the respondents. Until such time that the petitioner's representation is disposed of, the respondents shall not precipitate the crisis.
(v) Liberty is reserved to the petitioner to challenge the respondents' order on the petitioner's anticipated representation, if the same goes adverse to its interests."
20. Pursuant to the afore-extracted order, the petitioner appears to have given a representation on 07.07.2014 as is evident from the seal and signature of the receiving official of the respondent University. Though a vague attempt is made to deny its receipt, I do not see any specific denial or clarification in that regard. I find it hard to accept the version of respondents that they have not received the representation from the petitioner. The respondents' letter, dated 11.08.2014 issued by the 13 Registrar (Evaluation) refers to the petitioner's letter, dated 07.07.2014. The entire letter is extracted hereinbelow:
"Sir, Sub: Withdrawing of Tender floated for Examination Management System.
Ref: 1. Representation as per the direction of the Hon'ble High Court of Karnataka dated 3.7.2014 in W.P.No.18657/2014 (GM-TEN).
2. Your letter dated 7.7.2014.
With reference to the above, it is hereby brought to your notice that the tender floated for Examination Management System on 29.03.2014 is being withdrawn.
However, if the University intends to float the tender for Examination Management System, certain issues raised by you will be considered."
21. Having undertaken before this Court to consider the petitioner's representation on modifying certain terms and conditions of the tender notification, the respondent University or its functionaries cannot be absolved of their responsibility to consider the petitioner's representation. If they had not given such an undertaking to this Court, then the question of this Court interfering in the matter may not have arisen at all. 14
22. I therefore dispose of this petition with a direction to the respondent University to consider the petitioner's representation, dated 07.07.2014 (Annexure-E) within one week from today. Until such time that the respondents consider the petitioner's said representation and pass the order thereon, the proceedings of the impugned tender notification shall be kept in abeyance. Whether the respondents have to resume the impugned tender proceedings or resort to the initiation of fresh tender proceedings, would obliviously depend upon their exercise of considering the petitioner's said representation. No order as to costs.
Sd/-
JUDGE Cm/-