Karnataka High Court
Devappa S/O Mudakappa vs The Principal Secretary on 14 November, 2024
Author: Pradeep Singh Yerur
Bench: Pradeep Singh Yerur
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NC: 2024:KHC-D:16708
WP No. 106664 of 2024
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 14TH DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR
WRIT PETITION NO. 106664 OF 2024 (GM-TEN)
BETWEEN:
1. DEVAPPA S/O. MUDAKAPPA,
AGE: 64 YEARS, OCC: CLASS II CONTRACTOR,
R/O. WARD NO.27, HARIJANA VADA,
GANGAVATHI-583227,
TQ: GANGAVATHI, DIST: KOPPAL.
2. GURUPADA S/O. DURUGAPPA,
AGE: 32 YEARS, OCC: CLASS II CONTRACTOR,
R/O. #183, NEAR GOVT. SCHOOL,
KENGAL-584167, TQ: SINDHANUR,
DIST: RAICHUR.
3. BASAVARAJ S/O. VENKATESHAPPA,
AGE: 64 YEARS, OCC: CLASS II CONTRACTOR,
R/O. BEHIND SARAKARI SCHOOL,
GOGE HEBBAL-584120, TQ: MASKI,
Location: DIST: RAICHUR.
HIGH
MALLIKARJUN COURT OF ...PETITIONERS
RUDRAYYA
KALMATH KARNATAKA
DHARWAD (BY SRI. AVINASH BANAKAR, ADVOCATE)
BENCH
AND:
1. THE PRINCIPAL SECRETARY,
KARNATAKA STATE GOVERNMENT,
DEPARTMENT OF MINOR IRRIGATION
AND WATER DEVELOPMENT,
VIKAS SOUDHA, BENGALURU-560001.
2. THE EXECUTIVE ENGINEER,
M I AND GWD, DIVISION KOPPAL-583231,
TQ/DIST: KALABURGI.
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WP No. 106664 of 2024
3. THE SUPERINTEND ENGINEER,
M I AND GWD CIRCLE, KALABURGI-585101,
TQ/DIST: KALABURGI.
...RESPONDENTS
(BY SRI. V.S. KALASURMATH, HCGP)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO
i. ISSUE A WRIT OR ORDER OR DIRECTION IN THE NATURE OF
WRIT OF CERTIORARI TO QUASH IMPUGNED TENDER
NOTIFICATIONS BEARING NO'S: MI/2024-
25/OW/WORK_INDENT2548 AND MI/2024-
25/OW/WORK_INDENT2559 AS PER ANNEXURE-B AND C
ISSUED BY THE 2ND RESPONDENT IN SO FAR AS THE TENDER
WITH REGARD TO ANNUAL MAINTENANCE FOR PUMP AND
MOTOR NO-02 AND 03 AND CIVIL WORK IN GONDBAL, HYATI,
MUNDARAGI SITE-01, MUNDARAGI SITE-02, LACHANAKERI,
KARKIHALLI SITE-01, KARKIHALLI SITE-02 CHIKKABAGANAL
AND HIREBAGANAL LIFT IRRIGATION SCHEMES OF KOPPAL
TALUK KOPPAL DISTRICT AND ANNUAL MAINTENANCE
EXPENDITURE FOR PUMP AND MOTOR NO-02 AND 03 AND
CIVIL WORKS IN TIGARI, HANKUNTI, MATTUR, NEERALAGI
AND KATARKI LIFT IRRIGATION SCHEMES OF KOPPAL TALUK
AND KOPPAL DISTRICT TO THE 2ND RESPONDENT FOR
DIFFERENT WORKS TO THE 2ND RESPONDENT FOR DIFFERENT
WORKS.
ii. ISSUE A WRIT OR ORDER OR DIRECTION IN THE NATURE OF
WRIT OF MANDAMUS DIRECTING THE 2ND RESPONDENT TO
CONSIDER THE REPRESENTATIONS DATED 08.11.2024 VIDE
ANNEXURE-F, F-1 AND F-2 AND DIRECT THE RESPONDENT
NO.2 TO ISSUE FRESH TENDWER NOTIFICATION IN THE
INTEREST OF JUSTICE AND EQUITY AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, THE COURT MADE THE FOLLOWING:
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WP No. 106664 of 2024
ORAL ORDER
(PER: THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR)
1. Heard the learned counsel for the petitioners.
2. Learned High Court Government Pleader is directed to take notice for respondent Nos.1 to 3.
3. The petitioner is a Class-II Civil Contractor, having experience in civil construction work, including house and development works, and also providing manpower services to the different government institutions, holding licence and all other requirements.
4. Respondent No.2 had invited tender for annual maintenance for pump and motor No.02 and 03 and Civil Works in Gondbal, Hyati, Mundaragi site-01, Mundaragi site-02, Lachanakeri, Karkihalli site-01, Karkihalli site-02, Chikkabaganal and Hirebaganal lift irrigation schemes of Koppal taluk, Koppal District and annual maintenance expenditure for pump and motor No.02 and 03 and Civil Works in Tigari, Hankunti, Mattur, and Koppal district for the year 2023-2024 of different works, pertaining to the Executing Engineer, Minor irrigation and Ground Water -4- NC: 2024:KHC-D:16708 WP No. 106664 of 2024 Development Department Division, Koppal on 24.09.2024, for different tender amounts and scheduling the last date for submission of tender as 03.10.2024.
5. Petitioners being aspirants to participate in the tender could not participate in the tender because they were not fitting into the requirement of the tender notification floated by the tender inviting authority.
6. Learned counsel for the petitioners relies on the circular issued by the Government of Karnataka, which provides 24.10% reservation to the scheduled caste and scheduled tribe for the contract work of less than 1 crore, wherein the reservation is provided. Petitioners made a representation to the authorities dated 08.11.2024, being aggrieved by the tender notification, whereby the petitioners were ineligible and deliberately kept out of the participation of the tender. Therefore, he contends that the notification issued is arbitrary, perverse and deliberately made to keep away small tenderers like that of the petitioners from participating and is deliberately issued to favour someone. Under the circumstances, he -5- NC: 2024:KHC-D:16708 WP No. 106664 of 2024 contends that such notifications are liable to be set aside and quashed, which are against the principles of natural justice, which keeps away small time contractors from even participating in the tender. Learned counsel for the petitioners, further contends that the tender has not yet been opened and seeks indulgence of this Court in curbing such unilateral issuance of tender notification by the authorities. Hence, he seeks to allow this petition.
7. Per contra, learned HCGP vehemently contends that the petitioners does not have locus to challenge this tender notification as he has not participated in the tender. Secondly, he contends that the petition would not be maintainable for the reason that the entire tender process is over and the work contract has been issued. Therefore, this petition would not be maintainable.
8. It is also further contended by the learned HCGP, that as held by the Hon'ble Apex Court in the case of Tata Motors Limited Vs. Brihan Mumbai Electric Supply and Transport Undertaking (BEST) and Others reported in AIR 2023 SC 2717 and the -6- NC: 2024:KHC-D:16708 WP No. 106664 of 2024 subsequent judgments of the Hon'ble Apex Court in the case of National High Speed Rail Corporation Limited Vs. Montecarlo Limited and Another reported in (2022) 6 SCC 401 and in the case of Michigan Rubber (India) Limited Vs. State of Karnataka and Others reported in (2012) 8 SCC 216. It would be the prerogative of the tender inviting authority to choose and invoke its own terms and conditions for formulation of the tender, and it is also contended that it is not a fundamental right for the petitioner as it would be a contractual obligations. Therefore, though no inherent right would vest with the petitioners to question or challenge the impugned notification, learned HCGP relies upon the judgment of a Coordinate Bench of this Court in W.P.No.497 of 2024, which dealt with similar issue and relied on the judgment of Tata Motors case, whereby the judgment of Tata Motors is extracted, which reads as under:
"48. This court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court has -7- NC: 2024:KHC-D:16708 WP No. 106664 of 2024 cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. The courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer. (See: Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489).
51. We are of the view that the High Court should have been a bit slow and circumspect in reversing the action of BEST permitting EVEY to submit a revised Annexure Y. We are of the view that the BEST committed no error or cannot be held guilty of favoritism, etc. in allowing EVEY to submit a revised Annexure Y as the earlier one was incorrect on account of a clerical error. This exercise itself was not sufficient to declare the entire bid offered by EVEY as unlawful or illegal.
52. Ordinarily, a writ court should refrain itself from imposing its decision over the decision of the employer as to whether or not to accept the bid of a tenderer unless -8- NC: 2024:KHC-D:16708 WP No. 106664 of 2024 something very gross or palpable is pointed out. The court ordinarily should not interfere in matters relating to tender or contract. To set at naught the entire tender process at the stage when the contract is well underway, would not be in public interest. Initiating a fresh tender process at this stage may consume lot of time and also loss to the public exchequer to the tune of crores of rupees. The financial burden/implications on the public exchequer that the State may have to meet with if the Court directs issue of a fresh tender notice, should be one of the guiding factors that the Court should keep in mind. This is evident from a three-Judge Bench decision of this Court in Association of Registration Plates v. Union of India, reported in (2005) 1 SCC 679.
53. The law relating to award of contract by the State and public sector corporations was reviewed in Air India Ltd. v. Cochin International Airport Ltd., reported in (2000) 2 SCC 617 and it was held that the award of a contract, whether by a private party or by a State, is essentially a commercial transaction. It can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It was further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v. State of Orissa, reported in (2007) 14 SCC 517, that while invoking power of judicial review in matters as to tenders or award of contracts, certain special features should be borne in mind that evaluations of tenders and awarding of contracts are essentially commercial functions and principles of equity and natural justice stay at a distance -9- NC: 2024:KHC-D:16708 WP No. 106664 of 2024 in such matters. If the decision relating to award of contract is bona fide and is in public interest, courts will not interfere by exercising powers of judicial review even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be invoked to protect private interest at the cost of public interest, or to decide contractual disputes."
9. In view of the subsequent judgments in the case of Montecarlo and Michigan Rubber (supra), I do not find any good ground or cogent reason to interfere with the notification issued by the respondents as there is nothing that stems out to show that it is illegal or against the public interest or having violated the guidelines laid down by the Hon'ble Apex Court in the above mentioned judgments. Therefore, I pass the following:
ORDER Petition being devoid of merits, is dismissed.
Sd/-
(PRADEEP SINGH YERUR) JUDGE KGK CT-MCK List No.: 1 Sl No.: 44