Karnataka High Court
Transvisioin Software And Data ... vs Mangalore Electricity Supply Company ... on 16 November, 2023
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2023:KHC:40954
WP No. 24694 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF NOVEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 24694 OF 2023 (GM-TEN)
BETWEEN:
TRANSVISION SOFTWARE AND
DATA SOLUTIONS PVT. LTD.,
REGISTERED UNDER THE COMPANIES ACT, 1956
AT NO.3B-II, 1ST FLOOR, BLOCK III
VITC EXPORT BHAVAN, KIADB
M.S.INDUSTRIAL COMPLEX,
14TH CROSS, 4TH PHASE, 2ND STAGE,
(SUB-REGISTRAR OFFICE)
PEENYA INDUSTRIAL AREA
BENGALURU - 560 058
REPRESENTED BY ITS DIRECTOR,
SRI PRAKASH SAJJAN
...PETITIONER
Digitally signed
by PADMAVATHI (BY SRI UDAYA HOLLA, SR.ADVOCATE FOR
BK SRI. VIVEK HOLLA, ADVOCATE)
Location: HIGH
COURT OF AND:
KARNATAKA
1. MANGALORE ELECTRICITY SUPPLY COMPANY
LIMITED (MESCOM)
CORPORATE OFFICE,
4TH FLOOR, MESCOM BHAVAN,
BEJAI KAVOOR CROSS ROAD,
MANGALORE-575004
REPRESENTED BY ITS MANAGING DIRECTOR
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NC: 2023:KHC:40954
WP No. 24694 of 2023
2. NSOFT (INDIA) SERVICES PVT. LTD.,
REGISTERED UNDER THE COMPANIES ACT, 2013
SY NO.17, NO.580, 30TH MAIN,
BANASHANKARI 3RD STAGE,
BENGALURU - 560 085
REPRESENTED BY ITS DIRECTOR.
3. THE ADDL. CHIEF SECRETARY
GOVERNMENT OF KARNATAKA,
DEPARTMENT OF ENERGY,
VIDHANA SOUDHA
BENGALURU - 560 009.
...RESPONDENTS
(BY SRI SRINIVASA RAGHAVAN, SR.ADVOCATE FOR
SRI. SHAHBAAZ HUSAIN., ADVOCATE FOR R1;
SRI DHYAN CHINNAPPA, SR.ADVOCATE FOR
SRI AJAY NANDALIKE, ADVOCATE FOR R2;
MS.NAVYA SHEKHAR, AGA FOR R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
i) QUASH THE ORDER DATED 12/07/2023 PASSED BY THE
ADDL. CHIEF SECRETARY TO GOVERNMENT, ENERGY
DEPARTMENT, BENGALURU, IN APPEAL NO. 03/2023 (FILE NO.
ENERGY 150 FEB 2023) (ANNEXURE-O); ii) QUASH THE WORK
ORDER BEARING NO. MESCOM/COMN/HVCM/3/2022-
COML/1/56152/2023 DATED 18/08/2023 ISSUED TO THE R2
HEREIN (ANNEXURE-P) AND ETC.,
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner is before this Court calling in question an order dated 12.07.2023, by which the Additional Chief Secretary to Government, Energy Department, Bengaluru -3- NC: 2023:KHC:40954 WP No. 24694 of 2023 rejects the appeal in Appeal No.3/2023, filed by the petitioner and has further sought certain consequential prayers.
2. Heard Sri Udaya Holla, learned senior counsel for the petitioner, Sri Srinivasa Raghavan, learned senior counsel for respondent No.1, Sri Dhyan Chinnappa, learned senior counsel for respondent No.2 and Ms. Navya Shekhar, learned Additional Government Advocate for respondent No.3.
3. Facts adumbrated, are as follows:
The petitioner claims to be a company incorporated under the Companies Act, 1956 and is involved in the business of software publishing, consultancy, supply and documentation of readymade software, operating system software inter alia. A notice inviting tender (for short 'the tender') was issued on 09.02.2023 for the Web Based Total Revenue Management (TRM) Services in terms of the requirements of the Mangalore Electricity Supply Company Limited (for short 'MESCOM'). The petitioner claims to have attended the pre-bid meeting and brought to the notice of the respondent - Tender Inviting Authority that the tender has been tailor made to favour the second respondent as also, the fact that respondent No.2 is -4- NC: 2023:KHC:40954 WP No. 24694 of 2023 already carrying on with similar works in three distribution companies, out of the five which is contrary to the requirement that a bidder cannot be permitted to carry out similar work in two electric distribution utilities.
4. The narration stops there. It stops there for a particular reason. The petitioner venting out the aforesaid grievance chose not to participate in the tender as the tender documents which had to be uploaded was not done by the petitioner. Therefore, it becomes an admitted fact that the petitioner stayed outside the tender.
5. The justification in the submissions is that, the petitioner was not possessing the eligibility criteria in the tender for it to apply, as the eligibility criteria was specifically made to suit a particular tenderer.
6. The issue is, whether the petitioner staying outside the tender, having not participated in it, could maintain the petition calling in question the tender awarded to the successful tenderer. Since the issue of locus would cut at the root of the matter, a deeper delving into the claim of the petitioner is unnecessary and the issue whether a tenderer can challenge a -5- NC: 2023:KHC:40954 WP No. 24694 of 2023 tender process staying outside the tender also need not detain this Court for long or delve deep into the matter.
7. The Apex Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA v. GWALIOR JHANSI EXPRESSWAY LIMITED reported in (2018) 8 SCC 243 considering this issue, has held as follows:
"20. While considering the relief claimed by the respondent (claimant), the same should have been tested on the touchstone of the principle governing the tender process, especially when the validity of the tender document has not been put in issue or challenged before any competent forum. Going by the terms and conditions in the tender documents, as already alluded to in para 10 above, there is no title of doubt that the right of the claimant (respondent) to match the bid of L-1 or to exercise ROFR would come into play only if the respondent was to participate in the tender process pursuant to the notice inviting tenders from the interested parties. The objective of tender process is not only to adhere to a transparent mechanism but to encourage competition and give equal opportunity to all tenderers with the end result of getting a fair offer or value for money. The plain wording of the eligibility clause in the tender documents and the incidental stipulations make it explicit that the respondent was required to participate in the tender process by submitting its sealed bid (technical and financial). The fact that a deeming clause has been provided in the tender document that if the respondent was to participate in the bidding process, it shall be deemed to fulfill all the requirements of the tender Clauses 3 to 6 of RFP, being the existing concessionaire of the project, does not exempt the respondent from participating in the tender process; rather the tenor of the terms of the documents made it obligatory for the respondent to participate in the tender process to be considered as a responsive bidder, along with -6- NC: 2023:KHC:40954 WP No. 24694 of 2023 others. Having failed to participate in the tender process and, more so, despite the express terms in the tender documents, validity whereof has not been challenged, the respondent cannot be heard to contend that it had acquired any right whatsoever. Only the entities who participate in the tender process pursuant to a tender notice can be allowed to make grievances about the non-fulfillment or breach of any of the terms and conditions of the tender documents concerned. The respondent who chose to stay away from the tender process, cannot be heard to whittle down, in any manner, the rights of the eligible bidders who had participated in the tender process on the basis of the written and express terms and conditions. At the culmination of the tender process, if the respondent had not participated, in law, the offer submitted by the eligible bidders is required to be considered on the basis of the stated terms and conditions. Thus, if the claim of the respondent was to be strictly adjudged on the basis of the terms and conditions specified in the subject tender document, the respondent has no case whatsoever."
(Emphasis supplied) The judgment of the Apex Court has been followed by the Division Bench of the High Court of Calcutta in the case of SUBIR GHOSH v. STATE OF WEST BENGAL AND OTHERS reported in 2020 SCC OnLine Cal 2213. The Division Bench of the High Court of Calcutta also considers the fact that a tenderer who participates in the pre-bid meeting ought to have submitted his tender along with the documents to raise a challenge to the tender or the tender conditions at the later -7- NC: 2023:KHC:40954 WP No. 24694 of 2023 point in time. The petitioner is similarly situated as he has not participated in the tender.
8. The afore-quoted judgment is also followed by this Court in the case of MAHALAKSHMI ENGINEERING WORKS Vs. BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED in W.P.No.17266/2022 disposed on 09.11.2022.
"9. I have given my anxious consideration to the submissions made by the respective learned senior counsel and have perused the material on record. In furtherance whereof the issues that would fall for my consideration are -
(i) Whether BESCOM was right in seeking to re-
tender only those 10 tenders that were quashed by this Court? and
(ii) Whether petitioners have any locus to question any act of BESCOM qua the tender notified, notwithstanding their non-
participation in the tender process?
In the light of the second issue cutting at the root of the matter, I deem it appropriate to consider the same at the outset.
Issue No.2:
(ii) Whether petitioners have any locus to question any act of BESCOM qua the tender notified, notwithstanding their non-participation in the tender process?
10. The afore-narrated facts with regard to issuance of notice inviting tender for the works notified therein are not in dispute. The petitioners though belong to Scheduled Castes/Scheduled Tribes and reservation of 10 tenders being accorded thereto out of 50 tenders, did not participate in the -8- NC: 2023:KHC:40954 WP No. 24694 of 2023 tender process, are all a matter of record. The notice inviting tender did no where restrict any tenderer to participate in any tender on the NIT dated 28.03.2022. Though reservation was stipulated qua 10 tenders, the tenderers belonging to Scheduled Castes/Scheduled Tribes were not precluded from participating in the tenders of general category. As a matter of fact, there were several tenderers who did participate in both the tenders reserved for Scheduled Castes/Scheduled Tribes and in the general category. The petitioners chose to sit on the fence, did not participate in the tender process at all, neither in the 10 reserved tenders nor in the 40 unreserved tenders. Therefore, the petitioners now seek to point out lacunae in the tenders, sitting outside throughout. Whether that would be permissible is the question?
11. A tenderer who remains outside and then seeks to question the tender process or conditions stipulated in the tender notification would not get locus to challenge and condition of tender. This issue need not detain this Court for long or delve deep into the matter. The Apex Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA (supra) considering this issue, has held as follows:
"20. While considering the relief claimed by the respondent (claimant), the same should have been tested on the touchstone of the principle governing the tender process, especially when the validity of the tender document has not been put in issue or challenged before any competent forum. Going by the terms and conditions in the tender documents, as already alluded to in para 10 above, there is no title of doubt that the right of the claimant (respondent) to match the bid of L- 1 or to exercise ROFR would come into play only if the respondent was to participate in the tender process pursuant to the notice inviting tenders from the interested parties. The objective of tender process is not only to adhere to a transparent mechanism but to encourage competition and give equal opportunity to all tenderers with the end result of getting a fair offer or value for money. The plain wording of the eligibility clause in the tender documents and the incidental stipulations make it explicit that the respondent was required to participate in the tender process by -9- NC: 2023:KHC:40954 WP No. 24694 of 2023 submitting its sealed bid (technical and financial). The fact that a deeming clause has been provided in the tender document that if the respondent was to participate in the bidding process, it shall be deemed to fulfill all the requirements of the tender Clauses 3 to 6 of RFP, being the existing concessionaire of the project, does not exempt the respondent from participating in the tender process; rather the tenor of the terms of the documents made it obligatory for the respondent to participate in the tender process to be considered as a responsive bidder, along with others. Having failed to participate in the tender process and, more so, despite the express terms in the tender documents, validity whereof has not been challenged, the respondent cannot be heard to contend that it had acquired any right whatsoever. Only the entities who participate in the tender process pursuant to a tender notice can be allowed to make grievances about the non-fulfillment or breach of any of the terms and conditions of the tender documents concerned. The respondent who chose to stay away from the tender process, cannot be heard to whittle down, in any manner, the rights of the eligible bidders who had participated in the tender process on the basis of the written and express terms and conditions. At the culmination of the tender process, if the respondent had not participated, in law, the offer submitted by the eligible bidders is required to be considered on the basis of the stated terms and conditions. Thus, if the claim of the respondent was to be strictly adjudged on the basis of the terms and conditions specified in the subject tender document, the respondent has no case whatsoever."
(Emphasis supplied) The Apex Court clearly holds that the tenderer who would chose to stay away from the tender process cannot be heard to whittle down the rights of eligible bidders who had participated in the tender process on the basis of written and
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NC: 2023:KHC:40954 WP No. 24694 of 2023 express terms and conditions. At the culmination of the tender process, if the tenderer had not participated in law, he cannot be seen to question the terms and conditions. The petitioners, in the case at hand, have admitted their non participation in the tender. Staying away from the tender, they cannot now seek to challenge the tender. It is further germane to notice a similar view taken by the Calcutta High Court. A Division Bench of the High Court of Calcutta in the case of SUBIR GHOSH v. STATE OF WEST BENGAL AND OTHERS reported in 2020 SCC OnLine Cal 2213, has held as follows:
"4. The more important factor is that the tender process in this case opened sometime in March, 2019 and the closing date for submitting online bids was April 1, 2019. The writ petition was filed in January, 2020. Though it is submitted on behalf of the writ petitioner that the time to submit the bids was extended, no specific date in such regard is indicated. What is apparent is that the writ petitioner did not participate in the bidding process and yet chose to challenge the same.
5. It is possible that a prospective bidder finds the terms of the tender documents to be unfair or illegal and challenges the same; but such challenge has to be before the time to put in the bids is closed. At any rate, if a bid is made and the bid is thrown out on an illegal or unfair ground contained in the tender documents, even then, a challenge can be fashioned. But a person who has not participated in the bidding process at all cannot challenge the tender conditions on any ground whatsoever. This admitted aspect of the matter escaped the attention of the Single Bench while passing the impugned order of January 15, 2020.
6. For the reasons aforesaid, the order dated January 15, 2020 cannot be sustained and the same is set aside. Since the best arguable case of the writ petitioner will not result in any of the tender terms being altered as the writ petitioner did not participate in the process at all, the writ petition itself is dismissed. Nothing in this order will be construed to be an approval of the terms and conditions of the tender document and in an appropriate challenge, the same may be considered in accordance with law."
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NC: 2023:KHC:40954 WP No. 24694 of 2023 In the light of the judgments of the Apex Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA and the Division Bench of the Calcutta High Court in the case of SUBIR GHOSH holding that only a participant can question the tender, the challenge raised by the petitioners who are not the participants in the subject tender, would thus tumble down. Therefore, the second issue that fell for consideration which concerns locus of the petitioners to challenge the tender process being held against the petitioners, the first issue with regard to tender process would not arise for consideration, as it is trite law, that if a writ petitioner has no locus to raise a challenge to the subject matter, no other ground on merit of the challenge need be considered.
12. For the aforesaid reasons, finding that the petitioners have no locus to maintain the petition, the petition is dismissed as unentertainable."
(Emphasis supplied) In the light of the afore-quoted judgments rendered by the Apex Court, followed by the High Court of Calcutta and this Court, the petition is unentertainable for want of locus of the petitioner to challenge the tender process as he is not the one who participated in the tender but stays outside and wanting to throw a spanner in the spokes of the tender.
9. The petition lacking in merit, stands dismissed.
I.A.No.1/2023 is disposed, as a consequence.
Sd/-
JUDGE NVJ List No.: 1 Sl No.: 35