Karnataka High Court
M/S Padmavathi Enterprises vs The State Of Karnataka And Ors on 22 June, 2023
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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NC: 2023:KHC-K:1538
WP No. 201494 of 2023
IN THE HIGH COURT OF KARNATAKA,
KALABURAGI BENCH
DATED THIS THE 22ND DAY OF JUNE, 2023
BEFORE
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO. 201494 OF 2023 (GM-TEN)
BETWEEN:
M/S PADMAVATHI ENTERPRISES
11-6-77, BRESTAWAR PETITION, RAICHUR
TALUK AND DISTRICT RAICHUR-584101
REP. BY ITS PROPRIETOR
SRI. MATISAGAR
S/O KASTURI CHINDE
AGED ABOUT 48 YEARS
OCCUPATION BUSINESS
...PETITIONER
(BY SRI. SHIVANAND PATIL, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REP. BY ITS PRINCIPAL SECRETARY
DEPARTMENT OF MEDICAL EDUCATION
M.S. BUILDING, BENGALURU-560001
Digitally signed by
B NAGAVENI
Location: HIGH 2. THE DIRECTOR
COURT OF
KARNATAKA DIRECTORATE OF MEDICAL EDUCATION
ANANDA RAO CIRCLE, BENGALURU-560009
3. THE DEAN CUM DIRECTOR
RAICHUR INSTITUTE OF MEDICAL SCIENCES
RAICHUR-584102
4. CHIEF ADMINISTRATIVE OFFICER
RAICHUR INSTITUTE OF MEDICAL SCIENCES
RAICHUR-584102
5. M/S SHARADA GRAMEENA ABHIVRUDDI
AND VIVIDODDESHA ABHIVRUDDI SAMSTHE
KUSHTAGI, # 84/1, GOUDAR ONI, WARD NO.19
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NC: 2023:KHC-K:1538
WP No. 201494 of 2023
COLLEGE ROAD
TQ:KUSHTGI, DIST. KOPPAL-583 227
REP. BY ITS PRESIDENT
SRI. VEERANAGOUDA
AGE: MAJOR
OCC: BUSINESS
...RESPONDENTS
(BY SMT. MAYA.T.R., HCGP FOR R1 & R2;
SRI. SACHIN M. MAHAJAN, ADVOCATE FOR R3 & 4;
SRI. GANESH NAIK., ADVOCATE FOR R5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF
CERTIORARI TO QUASH THE IMPUGNED TENDER REJECTION ORDER
DATED 25.05.2023 UPLOADED IN THE WEB PORTAL OF
RESPONDENT NO. 3 AND 4 INSTITUTE, IN SO FOR AS IT RELATES
TO PETITIONER'S ESTABLISHMENT AT SERIAL NO. 8 AND 9 AS PER
ANNEXURE-F1 AND ETC.
THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING IN B-GROUP, THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
a. Issue a writ of certiorari to quash the impugned tender rejection order dated 25.05.2023 uploaded in the web portal of respondent No. 3 and 4 institute, in so for as it relates to petitioner's establishment at serial No. 8 and 9 as per Annexure-F1.
b. Issue a writ of mandamus directing the respondent No. 3 to consider the representation of the petitioner dated 26.05.2023 vide Annexure-G. Consequently direct the respondent No.3 and 4 to consider the bid of the petitioner.
2. The petitioner claims to be in the business of supplying food grains and other related items having -3- NC: 2023:KHC-K:1538 WP No. 201494 of 2023 trade licenses for the said purpose and supplying food grains to the respondent No.3 for last nearly a decade. On earlier occasions there being a supply of food grains which was a methodology adopted by respondent No.3, the methodology came to be changed by the tender notification issued on 15.2.2023, inviting tenders from the eligible tenderers to provide readymade food for a period of one year.
3. The petitioner having submitted his bid during the technical evaluation, the bid came to be rejected on account of:
i. ESI registration certificate and challan not having been produced.
ii. EPF registration certificate and challans from July 2022 to December 2022 not having been produced.
iii. The experiences certificate in government/ quasi-government departments or service not being as per the tender documents in as much as it was contended that grocery supply rather than ready food supply for the experience indicated in the tender by the petitioner.-4-
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4. It is aggrieved by the same that the petitioner is before this Court seeking for the aforesaid reliefs.
5. Sri. Shivanand Patil., learned counsel for the petitioner submits that;
5.1. the petitioner has submitted a representation and/or a letter stating that since the petitioner does not qualify for the filing requirements for the ESI or EPF registration, the said registration has not been obtained and it is for that reason the certificate had not been produced but a letter had been submitted stating that the petitioner does not come under the purview of the ESI and EPF which could be considered by the respondent by granting exemption from production of ESI and EPF registration.
5.2. Though the labour certificate had been produced by the petitioner the evaluator had rejected the same on account of inadequate -5- NC: 2023:KHC-K:1538 WP No. 201494 of 2023 labour. During the course of arguments, it is submitted that because the petitioner has only two labourers the same would not be adequate for supplying food in the hospital. 5.3. As regards the experience certificate, he submits that subsequent to the tender being issued there was a corrigendum issued on 27.2.2023 which permitted even food grains supplier to be eligible to participate in the tendering process. In as much as in the corrigendum bidders with experience in supply of readymade food or food grains were eligible to participate in the tender process. This corrigendum has not been taken into account while assessing the technical bid of the petitioner and as such he submits that the petitioner's bid has been wrongly rejected. 5.4. Lastly, he submits that the price which has been offered by the successful bidder respondent No.5 is not a reasonable price in as -6- NC: 2023:KHC-K:1538 WP No. 201494 of 2023 much as the price submitted by respondent No.5 being Rs.113/- per day, all the other bidders have submitted bids in excess of Rs.295/- and going out to Rs.676/- per day. Respondent No.3 bid being Rs.113/- is highly imaginary and not feasible.
5.5. While making their submission imputation is also made that respondent No.5 may not be in a position to supply proper and adequate food for the patients of respondent No.3 and on this ground also he submits that this Court to ought to intercede.
6. Sri. Sachin M. Mahajan., learned counsel for appearing for respondents No.3 and 4 would submit that;
6.1. the petitioner having failed the technical assessment, the bid of the petitioner has been rightly rejected by respondents No.3 and 4. The very fact, that there was a requirement in the tender notification that ESI and EPF -7- NC: 2023:KHC-K:1538 WP No. 201494 of 2023 certificates are to be produced would indicate that the same is mandatory and no exemption could be sought for on the ground that tenderer has lessor workers then the statutory stipulated minimum under the ESI and EPF Acts.
6.2. The submission is that the requirements of production of ESI and EPF certificate would necessarily imply that the tenderer would have to have the number of workers satisfying the minimum requirements for the ESI and EPF, the petitioner not having those requirements the petitioner would not have the qualification as prescribed under the tender notification. 6.3. The other submission is that the employer ought to have the liberty to describe the minimum qualification which shall be of the sole discretion of the employer and once the above qualification of production of ESI and EPF certificate is made clear in the notice inviting tender that being the qualification prescribed by -8- NC: 2023:KHC-K:1538 WP No. 201494 of 2023 the employer, it was for the tenderer to have fulfilled such a requirement.
6.4. Lastly, he submits that by way of the above petition what the petitioner is seeking for is to challenge the very conditions in the tender document. The petitioner having participated in the tender cannot be permitted to challenge any of the clauses in the tender. The qualification having been clearly prescribed those qualifications are required to be satisfied by the petitioner.
6.5. In so far as the experience certificate is concerned, he submits that the intention of employer in terms of corrigendum is that both the conditions have to be fulfilled in as much as the tenderer would have to have experience in both supplying readymade food as also supplying grains. However, prescribed turnover on year to year basis.
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 6.6. To support his above submission, he relies upon the decision in Tata Motors Limited vs. Brihan Mumbai Electric Supply and Transport undertaking (Best) reported in AIR Online 2023 SC 446 more particularly para 49 thereof, which is reproduced hereunder for easy reference;
49. It is not in dispute that the first and the foremost requirement of the Tender was the prescribed operating range of the single decker buses which would operate for around and average of 200 Kms in a single charge in "actual conditions" with 80% SoC without any interruption. Then materials on record would indicate that the TATA Motors in its bid deviated from this requirement and had informed BEST that it could carry the operating range in the "standard test conditions" which was not in accordance with the Tender conditions. The High Court has rightly observed in its impugned judgment that the bid of the TATA Motors failed to comply with the said clause. TATA Motors deviated from the material and the essential term of the Tender. It may not be out of place to state at this stage that it is only TATA Motors who deviated from the condition referred to above. However, we are of the view that the High Court having once declared TATA Motors as "non- responsive" and having stood disqualified from the Tender process should not have entered into the fray of investigating into the decision of BEST to declare EVEY as the eligible bidder. We are saying so because the High Court was not exercising its writ jurisdiction in public interest. The High Court looked into a petition filed by a party trying to assert its own rights. As held by
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 this Court in Raunaq International Ltd. (supra), that grant of judicial relief at the instance of a party which does not fulfil the requisite criteria is something which could be termed as misplaced. In Raunaq International Ltd. (supra), this Court observed as under:
"27. In the present case, however, the relaxation was permissible under the terms of the tender. The relaxation which the Board has granted to M/s. Raunaq International Ltd. is on valid principles looking to the expertise of the tenderer and his past experience although it does not exactly tally with the prescribed criteria.
What is more relevant, M/s. I.V.R. Construction Ltd. who have challenged this award of tender themselves do not fulfil the requisite criteria. They do not possess the prescribed experience qualification. Therefore, any judicial relief at the instance of a party which does not fulfil the requisite criteria seems to be misplaced. Even if the criteria can be relaxed both for M/s. Raunaq International Ltd. and M/s. I.V.R. Construction Ltd., it is clear that the offer of M/s. Raunaq International Ltd. is lower and it is on this ground that the Board has accepted the offer of M/s. Raunaq International Ltd. We fail to see how the award of tender can be stayed at the instance of a party which does not fulfil the requisite criteria itself and whose offer is higher than the offer which has been accepted. It is also obvious that by stopping the performance of the contract so awarded, there is a major detriment to the public because the construction of two thermal power units, each of 210 MW, is held up on account of this dispute. Shortages of power have become notorious. They also seriously affect industrial development and the resulting job opportunities for a large number of people. In the present case, there is no overwhelming public interest in stopping the project. There is no allegation whatsoever of any mala fides or collateral reasons for granting the contract to M/s. Raunaq International Ltd."
(Emphasis supplied)
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 6.7. Balaji Ventures Pvt. Ltd., vs. Maharashtra State Power Generation Company Ltd., reported in AIR online 2022 SC 906, more particularly para 5.1 thereof, which is reproduced hereunder for easy reference; 5.1 Now so far as the impugned Judgment and order passed by the High Court dismissing the writ petitions is concerned, what was challenged before the High Court was one of the tender conditions/clauses. The High Court has specifically observed and noted the justification for providing clause 1.12(V). The said clause was to be applied to all the tenderers/bidders. It cannot be said that such clause was a tailor made to suit a particular bidder. It was applicable to all. Owner should always have the freedom to provide the eligibility criteria and/or the terms and conditions of the bid unless it is found to be arbitrary, mala fide and/or tailor made. The bidder/tenderer cannot be permitted to challenge the bid condition/clause which might not suit him and/or convenient to him. As per the settled proposition of law as such it is an offer to the prospective bidder/tenderer to compete and submit the tender considering the terms and conditions mentioned in the tender document. 6.8. He submits that by relying upon Rule 28(d) of the Transparency Rules that it is lowest offer made by the consultant which is required to be
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 accepted and as such the lowest offer being that of respondent No.5 has been accepted. 6.9. As regards the quality of the food products, he submits that respondent No.5 who is now the lowest bidder is also with lowest bidder in so far as the Gulbarga Institute of Medical Sciences (GIMS) is concerned and the supply made to GIMS being without any compliant, the quality cannot be a matter of issue. The price at which the bid has been made for GIMS is at the rate of Rs.90/- per day. Whereas the bid submitted for respondent No.3 is 113/- which is at a higher rate. Therefore, the quality of supply being made to GIMS not having been brought into question, the petitioner cannot raise such a issue insofar as respondent No.5 is concerned. The petitioner ought to satisfy the requirement for the tender rather than question being quality supply of respondent No.5.
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7. Sri.Ganesh Naik., learned counsel appearing for respondent No.5 would submit that the respondent No.5 has qualified on all aspects and the respondent No.5 being the lowest tenderer, the awardal of the contact in favour of respondent No.5 is proper and correct and as such the petition would be dismissed.
8. Heard Sri.Shivanand Patil., learned counsel appearing for the petitioner, Sri.Sachin M. Mahajan., learned counsel appearing for respondents No.3 and 4 and Sri.Ganesh Naik., learned counsel appearing for respondent No.5. Perused papers.
9. Though several arguments have been advanced in the present matter, the basic question that is required to be answered by respondent No.3 is whether the rejection of tender document submitted by the petitioner is proper and correct.
10. In regard to rejection there are two main arguments, the first argument being that by implication there is a requirement of having sufficient number of workmen, so as to be registered under ESI Act and
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 EPF Act and produce the registration certificate. Secondly, it is contended that even as per the corrigendum the requirement is for having adequate experience both in food preparation and supply of grains.
11. These contention would have to be now tested on the basis of tender documents. Clause 13 and 14 of the tender documents relates to ESI and EPF, the same being in Kannada are reproduced hereunder for easy reference;
13. E.¦.J¸ï. £ÉÆÃAzÀt ¥ÀæªÀiÁt ¥ÀvÀæ ºÁUÀÆ ¥Àæ¸ÀÄÛvÀ ¸Á°£À°è K¦æ ï- 2022 ªÀiÁºÉ¬ÄAzÀ r¸ÀA§gï-2022 ªÀiÁºÉAiÀĪÀgÉV£À E.¦.J¥sï. ¥ÁªÉE¹zÀ ZÁ®£ï ¥Àæw.
14. E.J¸ï.L. £ÉÆÃAzÀt ¥ÀæªÀiÁt ¥ÀvÀæ ºÁUÀÆ ¥Àæ¸ÀÄÛvÀ ¸Á°£À°è K¦æ ï- 2022 ªÀiÁºÉ¬ÄAzÀ r¸ÀA§gï-2022 ªÀiÁºÉAiÀĪÀgÉV£À E.J¸ï.L. ¥ÁªÀw¹zÀ ZÁ®£ï ¥Àæw.
12. By reading of both clauses would only indicate that the EPF and ESI registration certificate alongwith challans from April 2022 to December 2022 for making payment of EPF dues have to be produced.
13. A reading of the entire tender notification it is seen that at no place is it specified that a minimum
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 number of workmen are to be engaged by the tenderer. Nor is the qualification of such worker specified. Merely by stating that EPF and ESI registration certificate have to be produced would not impose a requirement for the tenderer to have employed such number of persons as are required to satisfy the requirement of ESI and EPF Acts.
14. That apart, there is no particular Clause in the tender document which would indicate that non-production of EPF and ESI certificate would result in disqualification of the tender.
15. It is a matter of fact and law that obtaining of the EPF and ESI certification is not compulsory but only arises on a particular business entity meeting threshold limit under those particular Acts.
16. The submission is that the requirement of production of the certificates would imply that such number of workers have to be employed by the tenderer. Though the said submission is logical and makes common sense. But this Court would have to look at
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 the legal requirement under the contract, the contract not specifying minimum number of workmen the evaluator coming to a conclusion that the labour certificate is inadequate is highly discretionary and can result in arbitrary decisions. If at all the, respondent No.3 wanted certain minimum number of workmen to be employed by the tenderer with particular qualification, the same ought to be categorically stated in the tender document, which has not been done in the present case.
17. Though the employer is free to fix any condition to test the qualification of a bidder and/or fix any qualification that the bidder as to needs. I am of the considered opinion that clause 13 and 14 of the tender document cannot be read to have fixed the minimum labour requirement but only require the production of certain documents which are not compulsory for all business entity. Thus, the filing of the letter by the petitioner seeking exemption to produce the certificate on the account of the
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 exemption provided under the EPF and ESI Acts, in my considered opinion, would suffice and would be in compliance with clause 13 and 14.
18. As regards the experience certification a reading of the corrigendum would indicate two particularly distinct qualification, first condition being experienced in food supply and having supplied from 2016-17 to 2020-21 for any Government hospital having 100 beds as also 30 ICU beds. The second condition is for having supplied food grains for three years from 2018-19 to 2020-21.
19. These two conditions are separated by disjunctive in Kannada being "athava" which in English would be "or". Thus submission in this regard being that both the conditions have to be satisfied cannot be countenance by reading of corrigendum. The only conclusion that could be arrived is that either of the two qualifications are required to be satisfied.
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20. The wording would definitely have been different, if both the conditions are to be satisfied. Since, if both conditions would have to separate by conjunctive "and" which in kannada would be "mattu". The disjunctive "or" being used it cannot be said that both the conditions are required to be satisfied.
21. The petitioner having satisfied the second condition, the rejection of the bid of the petitioner on the ground that "grocery supply rather than ready food supply" is not in accordance with the tender document. This interpretation of "and" now sought to be given is also negatived by the remark made by the evaluator where he has stated "grocery supply rather than food supply". If the interpretation now made has to be accepted, it should have read "only grocery supply no food supply". The fact that both of them have been separated by using the word "rather than" would been mean that the conditions are disjunctive. Respondent No.3 has laid emphasis on
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 the first condition rather than on the second condition which is not permissible.
22. Thus, this rejection of the experience certificate not being in accordance with the tender documents, a rejection in total on all the above four grounds is not sustainable.
23. The decision which had relied upon the Sri. Sachin M. Mahajan., learned counsel for the respondent in Tata Motors case, in my considered opinion would not apply to the present fact situation. In as much as in Tata Motors's case , the petitioner had been disqualified and the disqualification was held to be valid. In the present case the disqualification and/or the rejection of the tender documents submitted by the petitioner on the basis of above reasoning has been held by me to be invalid. Thereby holding the petitioner would be eligible. Thus, the decision in Tata Motors case would not apply.
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24. As regards the decision in Balaji Ventures case that is was a case where the tenderer had challenged the clause in the tender notification after he participated in the tender. In the present case though it is contended that by implication the petitioner is challenging the tender, I am unable to accept the said submission, since there is no challenge to any particular clause in the tender but the petitioner is only contending that the petitioner has satisfied the clauses of the tender, which has not been properly considered by the evaluator. Having come to the conclusion that, all the qualifications have been met by the petitioner, it cannot be said that there is any challenge to the said tender document and as such I am of the considered opinion that the petitioner bid could not have been rejected.
25. As regards the contention of Sri. Shivanand Patil., learned counsel for the petitioner that the price offered by the respondent No.5 is highly illogical, impractical and not feasible.
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 The same is not a matter that could be decided by this court, more so when the respondent No.5 has being supplying to GIMS for a last three years and there is no compliant which has been received as regards such supplies. Furthermore the cost of supply to GIMS being Rs.90/- and the tender made here being for Rs.113/-, this fear expressed by Sri. Shivanand Patil., cannot be accepted.
26. Though the petitioner succeeds on the aspect of rejection of the over on the application wrongful rejection of the tender documents, even if this Court were to assume the petitioner to be a qualified bidder the bid made by the petitioner is for an amount of Rs.223/- which figure has been supplied by Sri.Shivanand Patil on enquiry (non-enquiry) since the financial bid of the petitioner had never been opened.
27. There would be no purpose served inasmuch as the financial bid which has been submitted by the petitioner is far higher than that submitted by
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 respondent No.5. If at all the financial bid of the petitioner had been lower than that submitted by respondent No.5 or near abouts, this Court could have directed respondent No.3 to revaluate the financial bid by holding the petitioner to be technically qualified. But having gone through the documents and the financial bid supplied by the petitioner even by holding the petitioner to be eligible bidder and the rejection being improper, the financial bid submitted by the petitioner being Rs.223/- per day and that submitted by respondent No.5 being Rs.113/- per day, there is a huge difference which cannot be filled even by negotiation.
28. As such, though the petitioner succeeds in aspect of rejection, the petitioner would fail in seeking for a direction to respondent to consider the bids furnished by the petitioner. As such, I pass the following:
ORDER i. The Writ Petition is partly allowed.
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NC: 2023:KHC-K:1538 WP No. 201494 of 2023 ii. A certiorari is issued, the tender rejection order dated 25.05.2023 issued by respondents No.3 and 4 at Annexure-F1 is quashed.
iii. The relief seeking for mandamus directing respondent No.3 to consider the representation of the petitioner dated 26.05.2023 at Annexure-G is rejected.
Sd/-
JUDGE SR, PRS List No.: 1 Sl No.: 74