Karnataka High Court
M/S Radex Stationery India Private ... vs State Of Karnataka on 3 March, 2022
Author: S.G.Pandit
Bench: S.G.Pandit
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF MARCH, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.G.PANDIT
WRIT PETITION NO.4801/2022 (GM-TEN)
BETWEEN:
M/S. RADIX STATIONERY INDIA PRIVATE LIMITED
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956, HAVING
ITS REGISTERED OFFICE AT REGISTERED
OFFICE AT 58A/1, KALU SARAI SARVAPRIYA VIHAR
2ND FLOOR, NEW DELHI-110016
REP. THROUGH ITS AUTHORIZED REPRESENTATIVE.
...PETITIONER
(BY SRI HARIKRISHNA PRAMOD, ADV.)
AND:
STATE OF KARNATAKA
DEPARTMENT OF PRINTING AND
STATIONERY AND PUBLICATIONS
R.V. COLLEGE POST, 8TH MILE
MYSORE ROAD, BENGALURU-560 059
REP. BY ITS DIRECTOR.
...RESPONDENT
(BY SRI M VINOD KUMAR, AGA)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
CONDITIONS STIPULATED IN SECTION VI, SCHEDULE 1 AND 2
OF THE NIT DATED 25.01.2022 CLAUSES 13.7.2. READ WITH 7.1
2
AND 11.2 OF THE NIT DATED 25.01.2022 ANNEXURE-A AS
ARBITRARY VAGUE DISCRIMINATORY AND IN CONTRAVENTION
OF THE KARNATAKA TRANSPARENCY IN PUBLIC
PROCUREMENT ACT 1999.
THIS PETITION COMING ON FOR ORDERS THIS DAY, THE
COURT MADE THE FOLLOWING:-
ORDER
The petitioner, a Company incorporated under the Companies Act, 1956 is before this Court under Article 226 of the Constitution of India, praying for quashing the conditions stipulated in Section VI, Schedule-1 and 2 of the NIT dated 25.01.2022, Clauses 13, 7.2 read with 7.1 and 11.2 of the NIT dated 25.01.2022 as arbitrary, vague, discriminatory and in contravention of the Karnataka Transparency in Public Procurements Act, 1999.
2. Heard Sri.Harikrishna Pramod, learned counsel for the petitioner and Sri.M.Vinod Kumar, learned AGA for the respondent-State.
3. The respondent-State Government issued tender notification dated 25.01.2022 (Annexure-A) inviting tenders 3 for supply of Copier Paper. The last date for submitting tenders was 25.02.2022. 28.02.2022 was the date for opening the technical and financial bid. The petitioner is said to have submitted his tender in pursuance of the tender notification dated 25.01.2022. Learned counsel for the petitioner invites attention of this Court to clause 13-Earnest Money Deposit, particularly to clause 13.4 which states that any tender not secured in accordance with Instructions to Tenderer (for short "ITT") clauses 13.1 and 13.3 above will be rejected by the Purchaser as non-responsive, pursuant to ITT Clause 22. It is his submission that the Tender Inviting Authority could not have incorporated the said clause and the said clause is contrary to sub-Rule (5) of Rule 26 of the Karnataka Transparency in Public Procurements Rules, 2000 (for short "2000 Rules"). Learned counsel submits that sub- Rule (5) Rule 26 stated above provides exemption from payment of Earnest Money Deposit to Micro and Small Enterprises during the purchases by all Government Department and State owned PSUs. In view of the said 4 provision, Tender Inviting Authority could not have imposed the above condition and reject tender submitted by such Micro and Small Enterprises as non-responsive. Further, the learned counsel submits that specification of the Copier Paper supplied is mentioned at Schedule-2 to the tender notification and Note (6) below the schedule indicates that the testing will be done visually and wherever required Lab testing may also be done. It is his submission that the authority cannot visually test, whether there is compliance of specifications of the paper to be supplied. It is his submission that, as to whether the Copier paper supplied meets the specification, needs Lab testing. Further learned counsel would submit that the requirement of Procuring authority is approximately 310 MT per year and the condition that the tenderer should have capacity of manufacturing at least 200 MT per day is unreasonable and arbitrary. It is also submitted that, condition that the tenderer shall have average annual turnover of at least Rs.250 lakhs in each of the previous 3 years is wholly arbitrary and unreasonable when compared to 5 the amount put to tender which is at Rs.2.57 crores. Thus, he submits that the conditions of tender stated above are arbitrary, vague and onerous. Thus, he prays for a direction to the respondents to consider his tender without insisting for compliance of the above conditions.
4. Per contra, learned Additional Government Advocate would submit that having submitted the tender and participated in the tender process, the petitioner is estopped from questioning the same. Further, the learned AGA would submit that incorporating conditions in the tender document is left to the wisdom of the Procuring Entity and the tenderer cannot question such conditions incorporated in the tender document. Thus, he prays for dismissal of the writ petition.
5. Having heard the learned counsel for the parties and on perusal of the writ petition papers, I am of the view that the petitioner would not be entitled for the reliefs sought in the writ petition.
6
6. Admittedly, the Tender Notification is dated 25.01.2022, last date for submitting tender was 25.02.2022 and opening of technical and financial bid was on 28.02.2022. Evaluation of bid has already taken place. Even though the petitioner was aware of the conditions of tender as on the date of Tender Notification as well as on the date of pre-bid meeting held on 25.02.2022, the petitioner is before this Court by filing the writ petition only on 24.02.2022. No doubt, the petitioner submitted his tender in pursuance of the impugned Tender Notification and he has participated in the tender process. Having participated in the tender process, it is not open for the petitioner to turn around and question the Tender Notification itself.
7. The contention of the petitioner relying on Rule 26(5) of 2000 Rules that the Micro and Small Enterprises registered with NSIC ought to have been exempted from payment of Earnest Money Deposit is premature and at this stage it cannot be gone into. Admittedly, the petitioner has submitted 7 his tender and participated in the tender process. The petitioner who claims that it is a Micro and Small Enterprises registered with NSIC could raise such a contention if the tender of the petitioner is rejected solely on the ground of non-payment of Earnest Money Deposit.
8. The contention of the petitioner that the condition at Schedule-2 Note (6) that the test will be done visually and wherever required by Lab testing, is arbitrary and unreasonable is merit less. Schedule-2 prescribes the specifications of Copier Paper. The successful tenderer is required to supply the Copier Paper with the specifications stated therein. The Tender Inviting Authority has made it clear that testing of specifications would be done visually and wherever required Lab testing may also be done. It is for the Tender Inviting Authority or Purchasing Authority to test the Copier Paper and wherever doubt arises to get it tested in the Lab. If the Tender Inviting Authority is satisfied with the said condition, this Court cannot substitute its own condition. It 8 is to be left to the best wisdom of the Tender Inviting Authority.
9. The tender conditions under challenge as stated above according to the learned counsel for the petitioner are arbitrary, vague and onerous. The petitioner has failed to demonstrate how those conditions are arbitrary, vague and onerous. The amount put to tender is approximately Rs.2,57,00,000/-. The requirement of the respondent-State is around 70,000 + 1000 + 60000 reams of copier paper as indicated in Section V of the Tender Notification. The condition that the tenderer shall have average annual turnover of Rs.250.00 Lakhs in each of previous 3 years cannot be said to be unreasonable or arbitrary. Those financial qualifications or conditions are incorporated only to see that the supplier or tenderer has the capacity to execute the tender. The condition that the capacity of manufacturer shall be at least 200 MT per day also is to see whether the tenderer would be in a position to supply the Copier Papers 9 as required by the State Government. The Hon'ble Apex Court in the case of M/S.MICHIGAN RUBBERS (INDIA) LIMITED v/s STATE OF KARNATAKA AND OTHERS reported in (2012)8 SCC 216 at paragraph 23 has held as follows:
"23. From the above decisions, the following principles emerge:
(a) The basic requirement of Article 14 is fairness in action by the State, and non-
arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State much act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities;
(b) Fixation of a value of the tender is entire within the purview of the executive and the courts hardly have any role to play in this process except for striking down such action of the executive as is 10 proved to be arbitrary or unreasonable. If the Government acts in conformity with certain healthy standards and norms such as awarding of contracts by inviting tenders, in those circumstances, the interference by courts is very limited;
(c) 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 the tendering authority is found to be malicious and a misuse of its statutory powers, interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders have to be laid down to ensure that the contractor has the capacity and the resources to successfully execute the work; and
(e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by court is very restrictive since no person can claim a 11 fundamental right to carry on business with the Government."
10. Learned counsel for the petitioner placed reliance on the decision of the Hon'ble Apex Court decided on 02.03.2022 in Civil Appeal No.5861/2009. The Hon'ble Apex Court at paragraphs 23 and 24 has observed that the Courts being the custodian of fundamental rights are under an obligation to interfere where there is arbitrariness, irrationality, unreasonableness, malafides and bias, if any, but at the same time, the Courts should exercise the power of judicial review with a lot of restraint, particularly in contractual and commercial matters. It has further made clear that the Courts should be slow in exercising their judicial review in exercise of their power of judicial review wherever it involves contractual and commercial matters. Thus, I am of the view that the decision relied upon by the petitioner would in no way assist him in the present case, particularly when the petitioner having participated in the tender process and have approached the Court after evaluation of technical and 12 financial bid is not entitled for any relief. Accordingly, the writ petition stands rejected.
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