Karnataka High Court
Sri. P Vidyanath Reddy vs The State Of Karnataka on 27 August, 2019
Equivalent citations: AIRONLINE 2019 KAR 3453
Author: Alok Aradhe
Bench: Alok Aradhe
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF AUGUST 2019
BEFORE
THE HON'BLE MR. JUSTICE ALOK ARADHE
WRIT PETITION NOS.25699-702 OF 2019 (GM-TEN)
BETWEEN:
1. SRI. P VIDYANATH REDDY
S/O P. CHANGA REDDY
AGED ABOUT 41 YEARS
R/O NO.10, 32ND MAIN, 5TH CROSS,
DOLLAR'S COLONY
BTM LAYOUT 1ST STAGE,
OLD MADIWALA,
BENGALURU 560068.
2. M/S NIRMAL ENVIRO SOLUTION PVT LTD.,
REP BY ITS MANAGING DIRECTOR,
P. VINODH KUMAR
S/O P PURANDHARA REDDY
AGED ABOUT 35 YEARS
NO.57/52, COMFORT ENCLAVE, 7TH MAIN,
17TH CROSS, BTM, 2ND STAGE,
BENGALURU 560 007.
3. SRI. P. VIKRAM DEVA REDDY
S/O LATE P DURUVADALU REDDY
AGED ABOUT 47 YEARS
NO.8, BEHIND SANDHYA TALKIES
OLD MADIWALA, BENGALURU 560068.
4. SRI. E RAMANA REDDY
S/O E VENUGOPAL REDDY
AGED ABOUT 51 YEARS
R/AT NO.20, 32ND MAIN
5TH CROSS, DOLLAR'S COLONY,
BTM LAYOUT, 1ST STAGE,
OLD MADIWALA, BENGALURU 560068.
... PETITIONERS
(By MR.SHIVANNA A G, ADV.)
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AND:
1. THE STATE OF KARNATAKA
BY ITS SECRETARY FOR
MUNICIPAL ADMINISTRATION,
VIDHANA SOUDHA,
DR. AMBEDKAR VEDHI,
BANGALORE 560001.
2. THE COMMISSIONER
BRUHAT BENGALURU
MAHANAGARA PALIKE
N.R. SQUARE,
BENGALURU 560 002.
3. THE CHIEF EXECUTIVE ENGINEER-1,
SOLID WASTE MANAGEMENT CELL,
NO.305, ANNEX-1 BUILDING,
BBMP HEAD OFFICE PREMISES,
N.R. SQUARE,
BENGALURU 560 002.
... RESPONDENTS
(By MR.S N PRASHANTH CHANDRA, ADV. FOR R2 & R3,
MR.VIJAY KUMAR A PATIL, AGA FOR R1)
---
THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH
THE TENDER NOTIFICATION ANNEXURE-A DATED 18.1.2019 AND
A1 DATED 25.04.2019 ISSUED BY THE R-3 AND DECLARE AS
NULL AND VOID AND DIRECT THE BBMP TO ISSUE MODIFIED THE
TENDER NOTIFICATION BY CALLING FOR FRESH TENDER TO THE
ABOVE SAID WORK; AND ETC..
THESE WRIT PETITIONS COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:-
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ORDER
Mr.Shivanna A.G., learned counsel for the petitioners.
Mr.Vijay Kumar A.Patil, learned Additional Government Advocate for the respondent No.1.
Mr.S.N.Prashanth Chandra, learned counsel for the respondent Nos.2 and 3.
2. The petitions are admitted for hearing. With consent of the learned counsel for the parties, the same are heard finally.
3. In these petitions under Article 226 and 227 of the Constitution of India, the petitioners inter alia seek a writ of certiorari for quashment of tender notification dated 18.01.2019 and to declare the same as null and void and to direct the Bruhat Bengaluru Mahanagara Palike (hereinafter referred to as 'the Corporation' for short) to issue the modified tender notification by calling fresh tender to the aforesaid aspect.
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4. Facts giving rise to the filing of the petitions briefly stated are that the petitioners are contractors with experience of collection of Municipal solid waste Management and transportation of generated wet and dry waste from last several years with the Corporation and other Municipal areas. The Corporation issued a tender notice dated 18.01.2019 in respect of proposal for selection of service provider for primary collection of segregated waste, sanitary waste, street sweeping waste and secondary transportation of segregated wet and street sweeping waste in wards of BBMP, Bengaluru. The petitioners, in response to the aforesaid tender notification, submitted their bids. The petitioner No.1 submitted his bid for ward Nos.36, 45, 53, 65, 119, 152, 192, petitioner No.2 submitted their bid for ward Nos.22, 166, 64, 198, 171, 173, petitioner No.3 submitted his bid for ward Nos.52, 194, 197, 159, 141, 111, 109, 102 and 84 and petitioner No.4 submitted his bid for ward Nos. 220, 44, 66, 138, 140 and 142. 5 Thereafter, an addendum was issued by the Corporation on 08.05.2019.
5. In condition No.1.1.5, it was stated that the assessment of actual investment for implementing the assignment will have to be made by the bidders. It is further stated that the Corporation may deploy its own infrastructure like the auto Tippers, compactors/Transfer station and also process at any of the existing of newly established decentralized waste processing facility at any time during the agreement period with prior intimation to the service provider as per the terms set out in the draft service agreement. It is further stated that based on the actual field level waste generation assessment subsequent to award of tender, the scope of work of tender of the petitioners would be suitably reduced where it is found necessary, during the remaining period of work under the intimation to the service provider. Schedule (c) deals with the scope of work of service provider and the 6 Corporation reserves the right to ask the service provider to substitute the auto tippers and associated manpower to the extent of maximum of 24.10% of the infrastructure of the manpower allocation in the wards as per the Government order dated 10.03.2005 in favour of Self Help Group Scheme / Paurakarmika scheme / marginalised sections of the society, which is not applicable to the tender floated by the Corporation.
6. It is the case of the petitioners that the aforesaid condition of reserving the work within the work allotted to the contractors amounts to a condition which is arbitrary and illegal and the aforesaid reservation is in violation of Article 19(1)(g) of the Constitution of India. It has also been averred that the aforesaid restriction is an unreasonable restriction. It has also been pleaded in the writ petitions that calling for tender for dealing with the wet and dry waste separately is not feasible and contrary to the recommendation made by the Committee of the 7 Corporation headed by the Mayor. In the aforesaid factual background, the petitioners have approached this Court.
7. Learned counsel for the petitioners submitted that the condition interfering with the work of successful bidder in the midst of the work is per se arbitrary. It is further submitted that once the successful bidder has submitted his bid amount and is carrying out the contract work, such an interference would amount to unreasonable restriction and the condition which empowers the Corporation to reduce the work allotted to the petitioners is per se arbitrary and is violative of Article 19(1)(g) of Constitution of India. It is also submitted that the aforesaid tender conditions have been incorporated in contravention of the recommendations made by the Committee headed by the Mayor herself. It is also urged that the reservation of 24.10% of the infrastructure and manpower for the marginalized sections of the society is arbitrary which 8 has been made on the basis of the Government order dated 10.03.2005. It is also pointed out that in the objection statement, reliance has been placed on behalf of the Corporation to the recommendation dated 15.09.2017. It is also urged that there can be no reservation of the work in a tender work which has been allotted to the successful bidder which is contrary to the Government order dated 10.03.2005.
8. On the other hand, learned counsel for the respondent Nos.2 and 3 submitted that despite the tender conditions, the petitioners, with their eyes wide open, have participated in the tender and therefore, after having participated in the tender, they are estopped from questioning the tender conditions contained in the notification inviting tender. It is further submitted that Rule 27 of the Rules framed under the Karnataka Transparency in Public Procurement Rules, 2000, has been amended and the aforesaid Rules provide that 17.15% of the work should 9 be tendered amongst registered contractors belonging to Scheduled Castes category and remaining 6.95% to be tendered amongst registered contractors belonging to Scheduled Tribes category. It is also argued that following the spirit of the aforesaid Rule and in order to encourage the participation of this marginalized section of society, the respondents have decided to reserve the right to ask the service provider to substitute auto tippers and compactors and associated manpower to the extend a maximum of 24.10% of the infrastructure of the manpower allocation in favour of these marginalised sections of the society. It is also pointed out that the respondents have received 568 bids in respect of 167 wards which is much more in number than all other previous participations. It is also submitted that the process of evaluation of the tender is on and in respect of some wards, tenders have been accepted. It is also urged that interference at this stage by this Court would adversely affect the public interest and would increase the cost of the services which have to be provided to 10 the citizens of city of Bengaluru for providing a clean environment. By way of rejoinder, learned counsel for the petitioners submits that there is no provision in the Government order dated 10.03.2005 to which reference has been made in the tender notification for providing reservation and the aforesaid Government order have no application to the fact situation of the case as the value of the contract is more than Rs.1 crore.
9. I have considered the submissions made by learned counsel on both the sides and have perused the record. 'TATA CELLULAR VS. UNION OF INDIA (1994) 6 SCC 651: (AIR 1996 SC 11), the Supreme Court while dealing with the scope of judicial power of review held that it would apply to exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. It has been held that the ground upon which the administrative action is subject to control by judicial review is on the grounds of illegality, irrationality and procedural impropriety. It has 11 further been held that terms of the invitation to tender are not open to judicial scrutiny because invitation to tender is in the realm of contract and more often than not, such decision are made qualitatively by experts. It has further been held that the Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides.
10. The principles regarding award of contract were again reiterated by the Supreme Court in 'IN DIRECTOR OF EDUCATION VS. EDUCOMP DATAMATICS LIMITED', (2004) 4 SCC 19: (AIR 2004 SC 1962) and it was held that Government must 12 have a free had in setting the terms of tender and the Courts cannot strike down the terms of tender prescribed by the Government because it feels that some other terms in the tender would have been fairer, wiser or more logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or actuated by malice. In 'SHAMNIT UTSCH INDIA PRIVATE LIMITED VS. WEST BENGAL TRANSPORT INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED', (2010) 6 SCC 303: (2010 AIR SCW 3974), the Supreme Court while taking note of the law laid down in ASSN. OF REGISTRATION PLATES VS. UNION OF INDIA', (2005) 1 SCC 679: (AIR 2005 SC 469), reiterated that State Government has the right to get the right and most competent person and in the matter of formulating conditions of tender documents, unless the action of tendering authority is found to be malicious and is a misuse of statutory powers, the tender conditions are unassailable. In 'SIEMENS AKTIENGESELEISCHAFT AND SEIMENS 13 LIMITED VS. DELHI AND SEIMENS LIMITED VS. DELHI METRO RAIL CORPORATION LIMITED AND OTEHRS', (2014) 11 SCC 288 : (AIR 2014 SC 1483), it was held that tenders floated by the Government are amenable to judicial review only in order to prevent arbitrariness and favoritism and protect the financial interest of the State and the public interest.
11. In the backdrop of the aforesaid well settled legal position, facts of the case in hand may be seen. It is trite law that mere reference to a wrong provision does not denude the authority of its power, if any other provision empowers it to do so. Undoubtedly, in the tender notification, the respondent Nos.2 and 3 have referred to the Government order dated 10.03.2005 which has no application to the fact situation of the case. However, the requirement of reservation has been prescribed in view of the notification dated 15.09.2017 which is in consonance of Rule 27A of the 14 Rules framed under the Act. There is no prohibition in law that respondent Nos.2 and 3 cannot incorporate such a condition in a notification inviting tender. In the instant case, the State Government by way of a notification dated 15.09.2017 inserted Rule 27A of the Rules under which 17.5% of the works have to be tendered amongst registered contractors belonging to Scheduled Caste category and remaining 6.9% to be tendered amongst registered contractors belonging to Scheduled Tribe category. In consonance with the spirit of the provisions contained in Rule 27A of the Rules, the respondent No.3 have provided 24.10% of the infrastructure of the manpower allocation in favour of the marginalized section of the Society. The policy decision of the Government taken in its wisdom and the action taken by the respondents in furtherance thereof cannot be questioned especially in the absence of any plea of malafides. It is pertinent to mention here that power of this Court of judicial review in the matter of formulation of tender condition, is extremely limited. 15 The tender inviting authority is well within its rights to fix the terms and conditions of the tender notification and this Court cannot interfere with the tender condition merely on the ground that some of the tender conditions would be fairer or wiser. Besides that, the petitioners, with their eyes wide open have participated in the tender and have submitted their bids and thereafter filed these writ petitions. The tender was issued on 18.01.2019. The process of finalization of tender is at the advanced stage and in respect of some of the wards, work order has been issued. Therefore, at this stage, if this Court in exercise of powers of judicial review interferes with the matter, the same would infact be contrary to public interest as the work of collection of waste will be adversely affected. Besides this, there is no element for public interest involved in the writ petitions.
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12. In view of the preceding analysis, I do not find any merit in the writ petitions. The same fail and are hereby dismissed.
Sd/-
JUDGE RV