Karnataka High Court
M/S Vijayashree Transformers vs Bangalore Electricity Supply Company ... on 20 June, 2022
Author: S.G.Pandit
Bench: S.G.Pandit
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.G.PANDIT
WRIT PETITION No.8492/2022 (GM-TEN)
BETWEEN:
1. M/S. VIJAYASHREE TRANSFORMERS
REP. BY ITS PROPRIETOR
S.N.PRASANNA KUMAR
AGED ABOUT 52 YEARS
S/O LATE S.R.NAGARAJU
REGISTERED OFFICE AT
T.M.ROAD, HULIHOOR DURGA
KUNIGAL TALUK
TUMKUR DISTRICT.
2. M/S. ACHU POWER EQUIPMENTS
REPRESENTED BY ITS PROPRIETOR
R UNNIKRISHNAN
AGED ABOUT 53 YEARS
S/O RAGHAVAN PILLAI
REGISTERED OFFICE AT
NO.35/36, 14TH CORSS
ANDRAHALLI MAIN ROAD
VISHVANEEDUM POST
BANGALORE-560091.
3. M/S. BYRESHWARA ELECTRICALS
REPRESENTED BY ITS PROPRIETOR
V.B. BETTASWAMY
AGED ABOUT 54 YEARS
S/O BETTEGOWDA
2
REGISTERED OFFICE AT
VADELRAKUPPE
KOTTEGERE HOBLI
KUNIGAL TALUK.
...PETITIONERS
(BY UDAY HOLLA, SR.COUNSEL A/W
KUM. M.L.SUVARNA, ADV.)
AND:
BANGALORE ELECTRICITY SUPPLY
COMPANY LIMITED
REP. BY ITS DEPUTY GENERAL
MANAGER (ELE), OPERATIONS-1
CORPORATE OFFICE, BESCOM
BANGALORE-560002.
....RESPONDENT
(BY SRI S SRIRANGA SR.COUNSEL A/W
SMT. SUMANA NAGANAND, ADV.)
++++
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE
ENTIRE RECORDS LEADING TO THE NOTIFICATIONS DATED
28.03.2022; QUASH (I) TENDER NOTIFICATION DATED VIDE
ANNX-B AND ETC.
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 14/06/2022 COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT MADE THE
FOLLOWING:
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ORDER
The petitioners are before this Court under Article 226 of the Constitution of India, questioning the correctness and legality of Tender Notifications at Annexures-B to L all dated 28.03.2022.
2. Heard learned Senior Counsel Sri.Udaya Holla for Smt.M.L.Suvarna, learned counsel for the petitioner and Sri.S.Sriranga, learned Senior Counsel along with Smt.Sumana Naganand, learned counsel for respondent/BESCOM as well as Sri.J.D.Kashinath, learned counsel for impleading applicants in I.A.No.3/2022.
3. Brief facts of the case leading to the filing of this writ petition are:
Petitioners are rate contractors for the works related to transformers. The respondent-BESCOM under Annexures-B to L dated 28.03.2022 invited tenders for Repairs and Reconditioning of 11 KV class single 4 coil/multi coil Conventional (Aluminium Wound) and 3, 4, 5 Star Rated failed Distribution Transformers of various Capacities from 25 to 500 KVA of CSP to Conventional bolt and nut type on lumpsum percentage (%) Rate Contract basis (Material, Labour and Salvage) at Transformer repair center in RR Nagara, RR Nagara Division of BESCOM Jurisdiction. The short term tender was reserved for Scheduled Caste/Scheduled Tribe category. But the petitioners, who are General Category contractors are before this Court challenging the short term tender reserved for SC/ST contractors, as the same is opposed to the provisions of Karnataka Transparency in Public Procurement Act, 1999 (for short "1999 Act") and further, the Tender Notification would not indicate the value of the tender, so as to make applicable reservation to Scheduled Caste/Scheduled Tribes.
4. Learned Senior counsel Sri.Udaya Holla submits that the tender is called for the purpose of repairing and 5 reconditioning of transformers and it is not a civil construction work as defined under Section 2(a) of the 1999 Act. Learned Senior counsel inviting attention of this Court to Section 2(a) of 1999 Act submits that "Construction Works" means putting up, demolishing repairs or renovation of buildings, roads, bridges or other structures including fabrication of steel structures and all other civil works and it would not include repairs and reconditioning of transformers. Learned Senior Counsel also submits that repairing and reconditioning of transformers in no manner could be called as construction work. Learned Senior Counsel invites attention of this Court to Section 6 of 1999 Act particularly, first proviso to Section 6 and submits that the proviso provides for reservation of construction works, value of which does not exceed Rs.50.00 lakhs. In the instant case, value of the tender is not mentioned in the tender and applicability of reservation could be based only on the value of the work. Further, he submits that reservation may be made only in 6 construction work, which is defined under Section 2(a) of 1999 Act. Since the tender would not indicate value of the work, Section 6 of 1999 Act would have no application to the tender notifications under challenge. Moreover the work is with regard to repairing and reconditioning of transformers.
5. Learned Senior Counsel submits that co-ordinate Bench of this Court in W.P.No.12397/2020 disposed of on 22.12.2020 and W.P.No.13232/2020 disposed of 25.02.2021 interpreting the construction work has held that reservation would not be applicable to work other than construction work. One of the writ petitions was with regard to supply of manpower for shifting and minor maintenance and another decision is with regard to operation and maintenance of street light system. Therefore, he submits that those decisions would squarely apply to the facts of the present case.
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6. Per contra, learned Senior counsel Sri.Sriranga for respondent-BESCOM submits that writ petition itself is not maintainable since the 1999 Act provides filing of appeal which the petitioners have not availed. When there is an alternate and efficacious remedy available to the petitioners, petitioners could not have directly approached this Court in this writ petition. Further, he submits that scope of judicial scrutiny of tenders is extremely limited and it is not open for the Court to examine the terms of tender notification. Placing reliance on the decision of Michigan Rubber [India] Limited V/s. State of Karnataka and Others [(2012) 8 SCC 216], he submits that in the matter of formulating conditions of a tender document and awarding of contract, greater latitude is required to be conceded to the State Authorities. Learned Senior counsel would submit that Section 6 of 1999 Act provides for reservation to Scheduled Castes and Scheduled Tribes in tenders relating to construction works. It is submitted that reservation to Scheduled 8 Castes and Scheduled Tribes could be provided in contract works value of which does not exceed Rs.50,00,000/-. Learned Senior counsel would submit that construction work also includes electrical work, relying upon the letter dated 13.02.2020, Annexure-R2 of the State Government to the respondent-BESCOM. Learned Senior counsel taking the Court through the definition of "construction works" defined under Section 2[a] of the Act submits that construction works means putting up, demolishing, repairs or renovation of buildings, roads, bridges or other structures including fabrication of steel structures and all other civil works. It is his submission that the words other than structures including fabrication under Section 2[a] includes the structures relating to the transformers. Thus, he justifies the reservation provided to Scheduled Castes and Scheduled Tribes under the impugned tender notification. It is submitted that respondent-BESCOM has acted in accordance with 1999 Act as well as Government letter 9 dated 13.02.2020 at Annexure-R2. According to learned Senior counsel, letter dated 13.02.2020 of the Government of Karnataka would indicate that even in tenders relating to electrical works, reservation has to be provided for tenderers belonging to Scheduled Castes and Scheduled Tribes. It is submitted that out of 50 short term tenders, only 10 short term tenders are reserved. As such, petitioners' right to participate is not affected since a tenderer would be eligible for award of only two short term tenders. It is also the submission of the learned Senior counsel that there is no challenge to Government letter dated 13.02.2020. Learned Senior counsel relying on Law Lexicon, submits that electricity sub-station is a structure. Therefore, when definition clause uses the word including structure, work relating to repair of transformers would fall within the definition of the construction works.
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7. Learned Senior counsel would submit that since the tender work is less than Rs.50,00,000/-, reservation is applicable under Section 6 of the 1999 Act as well as Rule 27-A of the Karnataka Transparency in Public Procurements Rules, 2000 [for short "2000 Rules"]. Since the tender is for rate contract business which depends upon quantity of transformers repaired per month, individual work order was issued. It is his submission that based on the work, individual work order would be issued which could be maximum of Rs.20,00,000/- to Rs.30,00,000/- per month and would not exceed Rs.50,00,000/- for any repair in a single work order.
8. On hearing the learned Senior counsel for the parties and on perusal of writ petition papers, the only question which falls for consideration is as to, Whether the tender work of repairing transformers would fall within the definition of "Construction Works" as defined under Section 2[a] of the 1999 Act and whether reservation 11 provided under Section 6 of the 1999 Act would be applicable?"
9. The answer would be negative for the following reasons:
The respondent-BESCOM issued tender notification inviting bids for Repairs and Reconditioning of 11 KV class single coil/multi coil Conventional (Aluminium Wound) and 3, 4, 5 Star Rated failed Distribution Transformers of various Capacities from 25 to 500 KVA of CSP to Conventional bolt and nut type on lumpsum percentage (%) Rate Contract basis (Material, Labour and Salvage) at Transformer repair center in RR Nagara, RR Nagara Division of BESCOM Jurisdiction. The scope of work is explained under clause (3) of the Tender Notification. The scope of work explained at clause 3.1 to 3.6 reads as follows:
1. The Bidder shall collect the failed distribution transformers from concerned Divisional stores only.12
2. The Bidder shall ensure the Serial Number of the Distribution transformers with make along with name plate details. In case if NNP transformer is available for repair the AEE (O) Division shall arrange to issue serial number of the distribution transformer as per the procedure adopted for Distribution Transformer Life Cycle Management Software (DTLMS) and as per the directions issued from the Corporate Office time to time.
3. Loading of failed transformers at divisional stores and unloading of failed transformers at repair centre shall be carried out by the Bidder.
4. Transportation of the faulty transformers from divisional stores to repair centre shall be carried out by the Bidder.
5. The inspection shall be carried out by AE/JE/SO of Section & AEE of C, O&M sub-Division and report in Annexure-1 shall be drawn at the field on reporting of transformer failure by the Section Officer and upload the Anneure-1 in DTLMS.
6. All the failed Transformers shall come to store without fail. The faulty Distribution Transformer shall be collected immediately from the date of 13 award after fulfilling the requisite formalities.
Each transformer should be opened out by removing top plate, yoke should be taken out and the HT/LT coils shall be removed at the respective stores either by drilling through the length of coil or by cutting the coil in presence of the committee headed by EE, C, O&M Division as Chairman and members such as AEE, MT Division, AEE QS & S and AEE (O) of respective division.
A perusal of the scope of work makes it clear that the bidder shall collect the field distribution transformers from the concerned divisional stores and shall effect repairs at the repair center. It is for the tenderer to load the failed transformers at divisional stores and unload the failed transformers at repair center. The transportation of faulty transformers from divisional stores to repair center shall be carried out by the bidder. Further, the work involves opening of each transformer by removing top plate, yoke should be taken out and HT/LT coils shall be removed at the respective stores either by the drilling through length 14 of coil or by cutting the coil in presence of the committee headed by the EE, C, O&M Division as Chairman and members such as AEE MT Division, AEE QS&S and AEE(O) of respective division. The repair work is to be carried out at a repair center by bringing the transformers from the divisional stores to the repair center. It is not the work of repairing transformer where it is fixed. As described in clause 3.6, the transformer is to be opened and coil shall be removed at respective stores which means the entire process is of mechanical repair of the transformers. It would not involve any civil work and tendered work would not relate to construction or civil work.
10. Admittedly, the short term tenders under Annexures-B to L dated 28.03.2022 is reserved for Scheduled Caste/Scheduled Tribe categories. No doubt, the respondent-Procurement Entity is governed by the 1999 Act and 2000 Rules. Section 6 of the 1999 Act and 15 Rule 27-A of 2000 Rules provide for reservation to tenderers belonging to Scheduled Caste/Scheduled Tribe categories. The respondent could provide reservation of 17.15% to tenderers belonging to Scheduled Caste category and reservation of 6.95% to tenderers belonging to Scheduled Tribe category in construction works, the value of which does not exceed Rs.50,00,000/-.
11. Section 6 of 1999 Act and Rule 27-A(a) of 2000 Rules reads as follows:
"6. Procurement Entitles to follow Procedure.- No tender shall be invited, processed or accepted by a Procurement Entity after the commencement of this Act except in accordance with the procedure laid down in this Act or the rules made thereunder:
[Provided that, the tender inviting authority shall, in the notified Departments out of those construction works, value of which does not exceed Rs.50.00 Lakhs such number of works not exceeding 17.15 per cent be tendered only among the tenderers belonging to the Scheduled Castes Category and such number of works not exceeding 6.95 per cent 16 be tendered only among tenderers belonging to the Scheduled Tribes Category, by taking out notices, communications and publications required to be taken following the prescribed procedures:
Provided further that, if no tender from persons belonging to the Scheduled Castes or Scheduled Tribes as the case may be, is received in response to the invitation in two attempts such works may be tendered among others.
Explanation.- For the purpose of this proviso,-
(1) "Scheduled Castes" shall have reference to the Scheduled Castes specified in Part VII of the Constitution (Scheduled Castes) Order, 1950 made under Article 341 of the Constitution of India and as amended from time to time;
(2) "Scheduled Tribes" shall have reference to the Scheduled Tribes specified in Part VI of the Constitution (Scheduled Tribes) Order, 1950 made under Article 342 of the Constitution of India and as amended from time to time.
Rule 27-A. Preference to Tenderers belonging to the Scheduled Castes or Scheduled Tribes in 17 Construction Works.- For the purpose of these rules, all procurement entities specified under clause
(d) of Section 2, which are taking up Construction works shall be the notified departments and they shall follow the following procedures, namely,-
(a) all works approved in the Action Plan or Appendix-E of every financial year, the value of which does not exceed Rs.50.00 lakh shall be put to randomization for selecting 17.15 per cent of these works to be tendered among registered contractors belonging to the Scheduled Castes Category and 6.95 per cent to be tendered among contractors belonging to the Scheduled Tribes Category."
A reading of the above provision of the Act and Rules makes it abundantly clear that the Procurement Entity could provide reservation to the Scheduled Caste/ Scheduled Tribe contractors in construction works, value of which does not exceed Rs.50,00,000/-.
12. Section 2(a) defines "Construction Works" which reads as follows:
"(a) "Construction Works" means putting up, demolishing, repairs or renovation of buildings, 18 roads, bridges or other structures including fabrication of steel structures and all other civil works."
"Construction Works" in terms of the definition stated above means putting up, demolishing, repairs or renovation of buildings, roads, bridges or other structures including fabrication of steel structures or other civil works. Learned Senior Counsel for respondent-BESCOM stresses the words "other structures including fabrication of steel structures" to say that it includes transformers, but the same is difficult to accept. The other structures including fabrication of steel structures relates to construction work of buildings, roads, bridges and all other civil works. At any stretch, work of tender i.e., removing transformers from divisional stores and repair the same at repair center could be called as construction works. It is not repair of transformer embedded or fixed to the land, to call it or to include in the definition of "Construction Works". On the other 19 hand, transporting a transformer and coil could be considered as mechanical or electrical repair of transformers. Relying on the definition of the word "Structure" as defined in third Edition [2012] of Law Lexicon by P.Ramanatha Aiyar, it is contended that electrical sub-station is a structure. The same would not help or assist the respondent-BESCOM. The meaning of structure is stated as - which is built or constructed; the term "structure" includes or comprehends a building. The same meaning cannot be given to the word "structure"
used in definition of "Construction Works" under Section 2(a) of 1999 Act. The word "Structure" used as above relates to the buildings, roads or bridges stated therein. The primary principle of interpretation is that the statutory provision should be construed according to intent of legislature. Such intent can be gathered from the language of the provision if the phraseology employed by the legislature is precise and plain and this by itself proclaims legislative intent in unambiguous terms, same 20 must be given effect to irrespective of the consequences. In the case on hand, the word used "structure" in the definition of "Construction Works" is secured and has no ambiguity, as stated it relates to buildings, roads or bridges. It is the duty of Court to expound the law as it stands and not to modify, alter or qualify its language.
13. Learned Senior Counsel for the respondent-BESCOM contended that the respondent-BESCOM has followed the Circular dated 13.02.2020 which has clarified that Section 2(a) of 1999 Act which defines "Construction Works"
would be applicable to tenders relating to electrical works. Annexure-R2 dated 13.02.2020 is neither a Circular nor Government Order nor an Executive Order issued by the State Government. It is a letter addressed by the Government to the various electricity companies. The said letter Annexure-R2 dated 13.02.2020 has no force either of executive order or executive instructions. A letter by the State Government cannot clarify a statutory provision, 21 such as definition of "Construction Works" under Section 2(a) of 1999 Act. What cannot be done or what cannot be achieved under 1999 Act cannot be done or achieved under a letter. Moreover, there is no provision under 1999 Act or no power is conferred under 1999 Act to issue directions to the Procurement Entities. The power of State Government is only under Sections 17 and 18 of 1999 Act, power to obtain information and power to call for records, respectively. In the case on hand since the repairing of transformers as specified in Clause 3.1 to 3.6 scope of work, under tender notification the work tendered cannot be construed as construction work as defined under Section 2[a] of the 1999 Act. Hence, no reservation to Scheduled Castes and Scheduled Tribes would be available in terms of Section 6 of the 1999 Act.
14. Learned Senior Counsel for the petitioner Sri.Udaya Holla contended that the tender notification does not specify the value of the tender so as to know whether 22 reservation to tenderers belonging to Scheduled Caste/Scheduled Tribe is applicable, since Section 6 specifies that Procuring Entity could reserve construction works, value of which does not exceed Rs.50,00,000/-. In the instant case, the tender notifications Annexures-B to L would not indicate value of the tender work and it would say that bidders shall pay Earnest Money Deposit ("EMD" for short) which varies from Rs.29,000/- to Rs.1,52,000/- in different tender notifications. The main object of 1999 Act is to ensure transparency in public procurement of goods and services. If the amount tendered or value of the work under tender is not indicated in the tender, it would not achieve the object of ensuring transparency in public procurement. The Procurement Entity need not indicate the exact value of the work, it should atleast indicate approximate value of the tender work. Learned Senior Counsel for the respondent submitted that the work tendered is rate contract based and as such the value depends on the work entrusted to an individual tenderer 23 on the basis of work tendered. Even in rate contract, the respondent could have indicated approximate value of the repair of each transformer depending on the nature of work or repair.
15. Rule 9 of 2000 Rules prescribes details to be mentioned in the notice inviting tenders. One of the requirements is details with regard to name of the scheme, project or programme for which procurement is to be effected and the amount of EMD payable. The EMD payable would depend on the value of work. Without specifying the value of the work, the respondent- Procurement Entity could not have indicated the EMD to be paid by a participating tenderer. Thus, mentioning of tender value is an essential requirement to ensure transparency in public procurement.
16. The respondent-Procurement Entity has raised a preliminary objection in its statement of objections stating that the writ petition would not be maintainable since 24 1999 Act provides alternate remedy. It is true that Section 16 of the Act provides alternate remedy of appeal to any tenderer aggrieved by an order passed by the Tender Accepting Authority. The petitioners-contractors are before this Court challenging the very tender notifications itself, on the ground that the Procurement Entity could not have provided reservation and on the ground that the tender notifications would not indicate the value of the tender work. Moreover, there is no order by the Tender Accepting Authority to avail appeal remedy. In the said circumstances, the contention of the respondent-BESCOM that the petitioners have alternate remedy is liable to be rejected. Reliance on the decision of the Hon'ble Supreme Court in Michigan Rubber [India] Limited (supra) by the learned Senior counsel for the respondent would have no application to the facts of the present case. Petitioners are not challenging either the conditions of tender document or awarding of contract to a particular tenderer, but the 25 contention is that tender notification itself is contrary to Section 6 of 1999 Act.
17. I.A.No.3/2022 is filed by one Firm and three proprietary concern claiming to be in the field of electrical contract to come on record as additional respondents. The impleading applicants claim that they belong to Schedule Caste and Schedule Tribes communities and claim that they are entitled for reservation under the impugned tender notification. In pursuance of tender notification dated 28.03.2022, the impleading applicants being eligible to participate, submitted their tender. Since they have submitted their tenders, they claim that they have interest in the present writ petition. As they have interest in the writ petition, they claim that they are necessary parties for adjudication.
18. Having heard the learned counsel for impleading applicants, I am of the view that mere submission of tender in pursuance of tender notification dated 26 28.03.2022, no right has accrued to the petitioners. The respondent authority which has provided reservation is required to defend its action. Hence, I am of the view that impleading applicants have no right to come on record and accordingly, I.A.No.3/2022 is rejected.
19. For the reasons recorded above, writ petition is allowed. The tender notifications bearing No.BESCOM/CGM(OP)/DGM (Op-1) AGM(Op-3)/M- 4/2021-22/48 (Annexure-B); BESCOM/CGM(OP)/DGM (Op-1) AGM(Op-3)/M-4/2021-22/55 (Annexure-C); BESCOM/CGM(OP)/DGM(Op-1) AGM(Op-3)/M-4/2021- 22/64 (Annexure-D); BESCOM/CGM(OP)/DGM (Op-1) AGM (Op-3)/M-4/2021-22/65 (Annexure-E); BESCOM/ CGM(OP)/DGM (Op-1) AGM(Op-3)/M-4/2021-22/69 (Annexure-F); BESCOM/CGM(OP)/DGM (Op-1) AGM (Op-3)/M-4/2021-22/85 (Annexure-G); BESCOM/ CGM(OP)/DGM (Op-1) AGM(Op-3)/M-4/2021-22/86 (Annexure-H); BESCOM/CGM(OP)/DGM (Op-1) AGM 27 (Op-3)/M-4/2021-22/87(Annexure-J); BESCOM/CGM(OP) /DGM(Op-1)AGM(Op-3)/M-4/2021-22/94 (Annexure-K); BESCOM/CGM(OP)/DGM (Op-1) AGM(Op-3)/M-4/2021- 22/99 (Annexure-L) all dated 28.03.2022 are quashed.
Sd/-
JUDGE mpk/-* CT:bms