Karnataka High Court
M/S Geo Consultancy Services vs The State Of Karnataka on 3 July, 2019
Author: Alok Aradhe
Bench: Alok Aradhe
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3rd DAY OF JULY 2019
BEFORE
THE HON'BLE MR. JUSTICE ALOK ARADHE
WRIT PETITION NOs.21634-21641 OF 2019 (GM-TEN)
BETWEEN:
1. M/S. GEO CONSULTANCY SERVICES
NO.485, 10TH CROSS, 8THMAIN
SADASHIVA NAGAR
BANGALORE-560080
REPRESENTED BY TS PROPRIETOR
DR. Y.M. MUNIRAJU.
2. M/S. PANCHAMUKHI BOREWELLS
NO.9/9, FLAT NO.402
NAVAMI NAKSHATHRA APARTMENT
J. LINGAIAH ROAD
SHESHADRIPURAM
BANGALORE 560020
REPRESENTED BY ITS PROPRIETOR
K. CHANDRASHEKAR NAYAK.
3. M/S. VENKATESHWARA TUBE WELLS
PARASHURAMAPURA
CHALLAKERE-577538
CHITRADURGA DISTRICT
REPRESENTED BY ITS PROPRIETOR
A. NAGESH.
4. M/S. LAKSHMI VENKATESHWARA BOREWELLS
NEAR S.B.M., BELLARY ROAD
SIRAGUPPA, BELLARY DISTRICT
PIN CODE:583121
REPRESENTED BY ITS PROPRIETOR
T. YOGIRAJ.
5. M/S. K.S.M. AGRO RIG SERVICES
NO.43, 5TH MAIN, 2ND CROSS
SUBHASH NAGAR
2
BANGALORE-560049
REPRESENTED BY ITS PROPRIETOR
T.V. SHIVAREDDY.
6. M/S. MANJUNATHA BOREWELLS
NO.56, 15TH CROSS, 6TH "A" MAIN
J.C. NAGAR, KURUBARHALLI
BANGALORE-560086
REPRESENTED BY ITS PROPRIETOR
B.C. RAMAKRISHNA.
7. M/S. K.S. BOREWELLS
NEAR ESSAR PETROL BUNK
KOTHI THOPU, TUMKUR-572101
REPRESENTED BY ITS PROPRIETOR
SHAMEER AHMED.
8. M/S RAJA RIG SERVICES
NO.258/1, RANNA KAVI ROAD
KUVEMPU NAGAR
CHANARAYAPTNA-573116
HASSAN DISTRICT
REPRESENTED BY TIS PROPRIETOR
M.N. DIWAKAR.
... PETITIONERS
(By Mr. N. LAKSHMINARAYANA, SENIOR COUNSEL FOR
Smt. ANUSHA L, ADV.)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY
SOCIAL WELFARE DEPARTMENT
VIKASA SOUDHA
DR. B.R. AMBEDKAR ROAD
BANGALORE-56001.
2. THE MANAGING DIRECTOR
DR. B.R. AMBEDKAR DEVELOPMENT
CORPORATION LIMITED, V.V.TOWERS
DR. B.R. AMBEDKAR ROAD
BANGALORE-560001.
3. THE MANAGING DIRECTOR
KARNATAKA MAHARSHI VALMIKI
SCHEDULE TRIBE DEVELOPMENT CORPORATION
3
JASMA BHAVAN ROAD
VASANTH NAGAR
BANGALORE-560052.
4. THE GENERAL MANAGER
DEVELOPMENT AND TENDER INVITING AUTHORITY
DR. B.R. AMBEDKAR DEVELOPMENT CORPORATION
LIMITED, V.V.TOWER, DR. AMBEDKAR ROAD
BANGALORE-56001.
5. THE DEPARTMENT OF FINANCE
DR. AMBEDKAR DEVELOPMENT CORPORATION LIMITED
M.G.ROAD, KOLAR-563101.
... RESPONDENTS
(By Mr. UDAYA HOLLA, SENIOR COUNSEL FOR
Mr. P. MAHESHA, ADV., FOR R2 TO R4
Mr. VIJAYKUMAR A. PATIL, AGA FOR R1
NOTICE TO R5 SERVED AND UNREPRESENTED)
---
THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT
THE RESPONDENTS TO TREAT ALL PROCEEDINGS IN TERMS OF
THE TENDER NOTIFICATION DATED 09.11.2018 PUBLISHED IN
THE NEWSPAPER ON 17.11.2018 IN NOTIFICATION DATED
09.11.2018 (ANNEXURE-D) SHALL BE DEEMED TO HAVE BEEN
LAPSED IN TERMS OF RULE 22(3) OF THE KARNATAKA
TRANSPARENCY IN PUBLIC PROCUREMENTS ACT, 1999 AS
AMENDED AND TREATED AS NON-EST AND NO FURTHER STEPS
SHALL BE TAKEN BY THE MANAGING DIRECTOR OF THE SECOND
RESPONDENT IN AWARDING ANY CONTRACTS AFTER THE EXPIRY
OF PERIOD SPECIFIED IN CLAUSE 12.1 AS PER THE TENDER
NOTIFICATION AND ETC.
THESE WRIT PETITIONS COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:-
4
ORDER
Mr.V.Lakshminarayana, learned Senior counsel for Smt.Anusha L., learned counsel for the petitioners.
Mr.Vijay Kumar A.Patil, learned Additional Government Advocate for the respondent No.1.
Mr.Udaya Holla, learned Senior counsel for Mr.P.Mahesha, learned counsel for the respondent Nos.2 to 4.
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 Articles 226 and 227 of the Constitution of India, the petitioners inter alia seek a writ of mandamus directing the respondents to treat all the proceedings in terms of tender notification dated 09.11.2018 as lapsed under Rule 22(3) of the Karnataka Transparency in Public Procurements Rules, 2000 (hereinafter referred to as 'the Rules' for short). The 5 petitioners also seek a writ of mandamus directing the respondents to issue fresh tender notification for all 60 packages covered under the tender notification dated 09.11.2018 and to declare the proceeding taken by the respondents beyond the period of 90 days to be non est.
4. Facts giving rise to the filing of the petitions briefly stated are that on 09.11.2018, the tenders were floated by respondent No.2 for drilling of borewells under Ganga Kalyan Scheme for the year 2018-19. As per the tender notification, 20.12.2018 was the last date for submission of tenders. Admittedly, some of the petitioners participated in the tender and submitted their tenders. It is averred in the writ petitions that since the procedure and the tender conditions were violated by the respondents, some of the tenderers filed a writ petition namely W.P.No.53791/2018. In the aforesaid writ petition, an ad interim order was granted and the respondents were restrained from proceeding 6 further with the impugned tender notification. Thereafter, the writ petition was dismissed by a Bench of this Court by an order dated 22.02.2019. Being aggrieved, the tenderers preferred a writ appeal namely W.A.No.841/2019 which was also discussed by a Division Bench of this Court vide order dated 23.04.2019. The petitioners in the meantime, submitted representations on 06.02.2019 and 14.05.2019 to re-tender the work of drilling of borewells as the evaluation of the tender had not taken place within a period of 90 days as per the provisions of the Rules. In the aforesaid factual background, the petitioners have approached this Court.
5. Learned Senior counsel for the petitioners, while inviting the attention of this Court to Clause 12.1 of the impugned tender notification submitted that the tenders shall remain valid for a period of not less than 90 days. While referring to Clause 16 of the tender notification, it was contended that the tenders must be submitted 7 online in the e-procurement portal to the employer on or before date and time mentioned in the e- procurement portal. It is further submitted that initially the time limit for submission of tender was 10.12.2018 which was extended upto 20.12.2018. It is also argued that the period of 90 days expired on 19.03.2018. However, the financial bid was opened on 09.05.2019 which could not have been done by the respondents as the tender proceeding had lapsed. In view of Rule 22(3) of the Rules, it is further submitted that order of stay granted pending disposal of a writ petition comes to an end with the dismissal of substantive proceeding. It is also submitted that Rule 22(3) of the Rules creates a legal fiction and the Court is bound by the same. In support of aforesaid submissions, reliance has been placed on decisions of Supreme Court in the cases of 'KANORIA CHEMICALS AND INDUSTRIES LTD. AND OTHERS Vs. U.P.STATE ELECTRICITY BOARD AND OTHERS' (1997) 5 SCC 772, 'KUMARAN Vs,. STATE OF KERALA AND ANOTHER' (2017) 7 SCC 471 AND 8 'SAMBHAV CONSTRUCTIONS, SIRSI Vs. STATE OF KARNATAKA AND OTHERS' 2003(6) KAR.L.J. 243.
6. On the other hand, learned Senior counsel for the respondents submitted that the tender in question has been invited for Ganga Kalyan Scheme which is meant to provide irrigation facilities with borewells and pumpsets and energisation to small and marginal farmers belonging to Scheduled Caste and Scheduled Tribe categories. It is further submitted that from careful scrutiny of Clause 12 of the tender notification, it is evident that the tender has to remain valid for a period of not less than 90 days and the tender notification nowhere specifies that it will lapse after 90 days. It is further submitted that the tender in question was under challenge in a writ petition before this Court and an interim order of stay was in operation which came to an end with the dismissal of the writ petition on 22.02.2019. Thereafter, the writ appeal was filed which was dismissed on 23.04.2019. After dismissal of the 9 writ appeal, the respondents have opened the financial bids on 09.05.2019. It is also submitted by the learned Advocate General that an act of the Court shall not prejudice no one. In support of aforesaid submissions reference has been made to decision in the case of 'RAMESHWAR AND OTHERS Vs. JOTRAM AND ANOTHER' (1976) 1 SCC 194. It is further submitted that the writ petition was dismissed on 22.02.2019 and the financial bid was opened within 90 days on 09.05.2019. It is also argued that till 22.02.2019, the respondents could not have opened the financial bid as the stay was in force. It is also submitted that Rule 22 of the Rules, in any case, does not apply to the fact situation of the case and the Court should not interfere with a decision making process even if some defect is found merely on making out of a legal point in the absence of any public interest. In the instant case, there is no element of public interest. In support of aforesaid submission reference has been made to the decision in the case of 'MASTER MARINE SERVICES 10 (P) LTD. Vs. METCALFE & HODGKINSON (P) LTD. AND ANOTHER' (2005) 6 SCC 138.
7. I have considered the submissions made by both the sides and have perused the record. The Supreme Court in MICHIGAN RUBBER (INDIA) LIMITED Vs. STATE OF KARNATAKA AND OTHERS', (2012) 8 SCC 216, after taking note of the decisions of the Supreme Court in TATA CELLULAR Vs. UNION OF INDIA (1994) 6 SCC 651, RAUNAQ INTERNATIONAL LTD. Vs. IVR CONSTRUCTION LTD. (1999) 1 SCC 492 and ASSOCIATION OF REGISTRATION PLATES Vs. UNION OF INDIA (2005) 1 SCC 679, culled out the legal principles and held that basic requirement of Article 14 is fairness in action by the State and non-arbitrariness in essence and substance is the heart beat of fairplay and these actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. It was further 11 held that in the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authorities is found to be malicious and a misuse of statutory powers, interference by the Courts is not warranted. It is also held that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, interference by Court is very restrictive since no person can claim a fundamental right to carry on the business. The Hon'ble Supreme Court formulated the following two questions which the Court should pose itself before invoking the power of judicial review, namely:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting 12 reasonably and in accordance with relevant law could have reached"? and
(ii) Whether the public interest is affected?
It was accordingly held that if answers to the above questions are in the negative, then there should be no interference under Article 226 of the Constitution of India.
8. It is equally a well settled legal principle that award of contract whether it is by a private party or by a public body or the State, is essentially a commercial transaction and in arriving at a commercial decision, considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can enter into negotiations before finally deciding to accept one of the offers made and it is free to grant any relaxation for bona fide reason if the tender conditions permit such relaxation. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all 13 concerned. It is further held that even if some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 with great caution and must exercise only in furtherance of public interest and not merely on making out of a legal point. It is also held that Court should always keep the larger public interest in mind in order to decide whether or not its intervention is called for and only when it comes to the conclusion that overwhelming public interest requires interference, the Court should intervene. (See SANJAY KUMAR SHUKLA Vs. M/s. BHARAT PETROLEUM CORPORATION LTD. AND ORS. AIR 2014 SC 3778 and MAA BINDA EXPRESS CARRIER AND ANOTHER Vs. NORTH-EAST FRONTIER RAILWAY AND OTHERS (2014) 3 SCC 760, BAKSHI SECURITY AND PERSONNEL SERVICES PRIVATE LTD. Vs. DEVKISHAN COMPUTED PRIVATE LIMITED AND OTHERS (2016) 8 SCC 446, MONTECARLO LIMITED Vs. NATIONAL THERMAL POWER CORPORATION 14 LIMITED (2016) 15 SCC 272, CONSORTIUM OF TITAGARH FIREMA ADLER S.P.A-TITAGARH WAGONS LTD. Vs. NAGPUR METRO RAIL CORPORATION LTD. AND ANOTHER (2017) 7 SCC 486, CRRC CORPORATION LIMITED Vs. METRO LINK EXPRESS FOR GANDHINAGAR AND AHMEDABAD COMPANY LIMITED (2017) 8 SCC 282 AND MUNICIPAL CORPORATION, UJJAIN AND ANOTHER Vs. BVG INDIA LIMITED AND OTHERS (2018) 5 SCC 462.
9. In the backdrop of aforesaid well settled legal principles, the facts of the case in hand may be examined. Clause 12.1 and Clause 16 of the tender notification read as under:
"12.1 Tenders shall remain valid for a period not less than ninety days after the deadline date for tender submission specified in Clause 16. A tender valid for a shorter period shall be rejected by the employer as non-responsive.15
16. Deadline for submission of the tenders 16.1 Tenders must be submitted online in the e-Procurement portal to the Employer on or before Date & Time as mentioned in e- procurement portal.
16.2 The Employer may extend the deadline for submission of tenders by issuing an amendment in accordance with Clause 9, in which case all rights and obligations of the Employer and the Tenderers previously subject to the original deadline will then be subject to the new deadline."
10. Thus, from conjoint reading of the aforesaid clauses, it is evident that the aforesaid clauses provide that the tenders shall remain valid for a period of 90 days. In other words, a tenderer cannot withdraw his bid before a period of 90 days. None of the clauses of the tender notification provides that if the process of the tender is not completed within a period of 90 days, the entire process of tender would lapse. Before proceeding 16 further, it is apposite to take note of Rule 22 of the Rules which reads as under:
"22. Time taken for evaluation and extension of tender validity. - (1) The evaluation of tenders and award of contract shall be completed, as far as possible, within the period for which the tenders are held valid. (2) The Tender Accepting Authority shall seek extension of the validity of tenders from the tenderers for the completion of evaluation, if it is not completed within the validity period of tender.
(3) In case the evaluation of tenders and award of contract is not completed within extended period, all the tenders shall be deemed to have become invalid and fresh tenders may be called for."
11. From perusal of the aforesaid Rule, it is evident that evaluation of tenders and award of contract shall be completed as far as possible within a period for which the tenders are held valid. It further provides that in case evaluation of tenders and award of contract is not completed within the extended period, all the 17 tenders shall be deemed to have become invalid and fresh tenders may be called for. The aforesaid Rule requires the tender accepting authority to carry out evaluation of tenders and award of contract as far as possible within the period for which the tenders are held valid. In the instant case, admittedly, an order of stay was granted by a Bench of this Court on 03.12.2018. The aforesaid order remained in force till dismissal of the writ petition i.e. 22.02.2019. Thereafter, the respondents have opened the financial bid within a period of 90 days i.e. on 09.05.2019. Thus, in the instant case, for the purposes of counting the period for evaluation of the tenders and award of contract, the period for which the stay remained in operation i.e. from 03.12.2018 till 22.02.2019 has to be excluded as an act of the Court shall not prejudice no one. Therefore, it cannot be said that there has been a violation of Rule 22 of the Rules in the fact situation of the case. Besides that, there is no element of public interest which requires interference of this Court in 18 exercise of extra ordinary discretionary jurisdiction under Article 226 of the Constitution of India.
12. Sofar as reliance placed by the learned Senior counsel for the petitioner in the case of KANORIA CHEMICALS AND INDUSTRIES LTD. supra, is concerned, the aforesaid settled position that life of an interim order is quo terminus with the main proceeding, cannot be disputed. However, the aforesaid well settled legal position is of no assistance to the petitioners in the fact situation of the case as within a period of 90 days from the date of dismissal of the writ petition, the financial bid was opened. Similarly, the legal proposition laid down with regard to the scope of legal fiction in KUMARAN supra, also cannot be disputed. Sofar as decision in SAMBHAV CONSTRUCTIONS supra, is concerned, the same does not deal with a situation where the evaluation of tender is stayed on account of order of stay passed by a Court. Therefore, 19 the aforesaid decision is also of no assistance to the petitioner.
13. In view of proceeding analysis, I do not find any merit in the writ petitions. The same fail and are dismissed.
Sd/-
JUDGE RV