Karnataka High Court
M/S Sri Krishna Shelters Pvt Tld vs The Principal Secretary To on 5 February, 2014
Author: A.S.Bopanna
Bench: A S Bopanna
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 5TH DAY OF FEBRUARY 2014
BEFORE
THE HON'BLE MR. JUSTICE A S BOPANNA
WRIT PETITION No.57346/2013 (GM-TEN)
BETWEEN:
M/S SRI KRISHNA SHELTERS PVT. LTD.,
HAVING ITS REGISTERED OFFICE AT
# 59, "SRI KRISHNA SUDHA"
WEST ANJANEYA TEMPLE STREET,
OFF. BASAVANAGUDI MAIN ROAD,
GANDHIBAZAAR
BANGALORE-560 004
REP. BY ITS MANAGING DIRECTOR ... PETITIONER
(BY SRI RAVISHANKAR D R, ADV. FOR
M/S. LEX NEXUS)
AND:
1. THE PRINCIPAL SECRETARY TO
GOVERNMENT OF KARNATAKA
ENERGY DEPARTMENT
VIKASA SOUDHA
BANGALORE- 01
2. BANGALORE ELECTRIC SUPPLY
COMPANY LIMITED, GOVERNMENT
OF KARNATAKA UNDERTAKING
HAVING ITS CORPORATE OFFICE
AT BESCOM K R CIRCLE
BANGALORE-560 009
REP. BY ITS MANAGING DIRECTOR
3. DIRECTOR TECHNICAL
BANGALORE ELECTRIC SUPPLY
COMPANY LIMIED GOVERNMENT OF
KARNATAKA UNDERTAKING
HAVING ITS CORPORATE OFFICE AT
2
BESCOM, K R CIRCLE,
BANGALORE 560 009
4. GENERAL MANAGER (DAS AND SG)
BANGALORE ELECTRIC SUPPLY
COMPANY LIMITED, GOVERNMENT
OF KARNATAKA UNDERTAKING
HAVING ITS OFFICE AT 4TH FLOOR
M A BHAVAN, N T ROAD, BESCOM
BANGALORE-560 001 ... RESPONDENTS
(BY SRI H V MANJUNATHA, AGA. FOR R1
SRI B RUDRAGOWDA, ADV. FOR R2-4)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH
ANNEX-A THE TENDER NOTIFICATION DTD.28.10.2013 AS
VIOLATIVE OF ARTICLE 28A OF KARNATAKA TRANSPARENCY IN
PUBLIC PROCUREMENT RULES, 2000 AND QUASH ANNEX-C
DTD.10.12.2013 THE REJECTION OF THE TECHNICAL BID OF
THE PETITIONER BY THE RESPONDENT.
THIS WRIT PETITION HAVING BEEN RESERVED FOR
ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING :
ORDER
The petitioner is before this Court assailing the tender notification dated 28.10.2013 as being violative of Rule 28-A of the Karnataka Transparency in Public Procurement Rules, 2000 ('KTPP Rules' for short). The petitioner is also assailing the rejection dated 10.12.2013 whereby the technical bid of the petitioner was rejected.
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2. The respondents had invited the tender through e-procurement for construction of BESCOM Integrated Control Centre-I Building at HSR Layout. The same was invited as two cover system where two separate folders were to be submitted. The petitioner had responded to the same. The petitioner on noticing the website of the respondents found that the status of the petitioner's tender was shown as 'rejected' as per the printout obtained on 10.12.2013 and produced at Annexure-C to the petition. It is in that view, the petitioner is before this Court.
3. The contention of the petitioner is that the tender invitation is contrary to Rule 28-A of the KTTP Rules since in the case of turnkey contract the two stage tender system should be adopted instead of two cover tender system. It is contended that the first stage tender should consist of technical tender only without reference to rates and prices which is to be opened by the Tender Inviting Authority and evaluation to be made. Thereafter on preparation of the list of 4 qualified and responsive tenderers the Tender Inviting Authority is required to convene a clarification meeting and prepare all required amendments, additions, deletions etc. Thereafter the subsequent process is to be followed. Since the same has not been done and is contrary to the Rules, the process is vitiated. The petitioner also contends that the manner of rejection of the bid whereby the petitioner's bid was rejected is arbitrary and the same yardstick has not been applied in respect of all the bidders. The reasons indicated presently for the rejection are also not of consequence as compared to the nature of the work and the technical qualification that is required. Even otherwise, the petitioner has satisfied the requirement of having completed an earlier project of GF+4 floors. It is also the case of the petitioner that as against the price quoted by two other bidders who are considered to be technically qualified at Rs.19.23 crores and Rs.32 crores, the price quoted by the petitioner is Rs.18.69 crores and as such, the bid of the petitioner should 5 have been accepted and the work should be assigned to the petitioner.
4. The respondents have filed their objection statement and have denied that the petitioner's bid was entitled to be considered. The two cover system as adopted is sought to be justified and it is contended that the pre-bid meeting was scheduled on 08.11.2013 and all queries raised by the petitioner had been answered. The techno commercial bid was opened on 25.11.2013. The first folder viz., the techno commercial bid and the notes prepared on the basis of the particulars given by the tenderers were sent to the Tender Scrutiny Committee which consisted of a Chairman and six members. The certificates produced by the petitioner did not indicate that he had constructed GF + 4 floors as per the requirement. In one of the certificates, it was mentioned as GF + 2 Upper floors. In addition to the same, the petitioner also did not comply with the requirement of filing a declaration that they had not been blacklisted by any Government Department or PSU as on the date of submitting the 6 bid. Therefore, the Essential Conditions II (a) (i) and (v) were not complied and as such, the Tender Scrutiny Committee has not opened the financial bid as the petitioner was not qualified. Out of the four tenderers, two of them had qualified in the techno commercial bid. The present work is taken up under the Bangalore Distribution Up-gradation Project with assistance from Japan International Cooperation Agency, Government of Japan (JICA) and the project is to be executed expeditiously. The contention that the respondents have not complied Rule 28-A of the KTTP Rules is denied. The Government Order dated 14.10.2008 is relied to contend that in respect of the projects which is more than Rs.10 crores, KW-4 shall be followed instead of KW-6. KW-4 is calling for tenders under two cover system. The petitioner having participated and failed in the tender in any event cannot question the same, is their contention.
5. Heard Sri D.R. Ravishankar, learned counsel for the petitioner and Sri B. Rudragowda, learned 7 counsel and Sri H.V.Manjunatha, learned Government Advocate for the respondents and perused the petition papers.
6. In the light of the contentions, a perusal of Rule 28-A of the KTTP Rules no doubt would provide for two stage tender system in the case of turnkey contracts involving the nature of work that is indicated therein. The tender notification refers to the invitation of tenders for construction of BESCOM Integrated Control Centre on engineering, procurement and construction on total turnkey basis under two cover system. Though detailed reference with regard to the nature of the work and the process to be followed and the appropriate system that was required to be adopted would have required detailed consideration, if the same had arisen for consideration in a circumstance if the petitioner was before this Court even before submitting his tender and the process being commenced, the issue would have to be viewed differently as it has been raised after the opening of tenders since the extent to which this Court can 8 traverse is also an aspect to be noted. Insofar as the respondents are concerned, they have relied on the Government Order dated 04.10.2008 (Annexure-R6) where a provision has been made for adopting the two cover system. In addition, it is contended that the petitioner cannot raise the said objection at this juncture after having participated in the process.
7. To contend that the Government Order cannot over-rule the statutory provisions and the Court would not be bound by the same, the learned counsel for the petitioner has relied on the decisions in the case of Bengal Iron Corporation and Another -vs- Commissioner Tax Officer and Others -AIR 1993 SC 2414 and in the case of Commissioner of Central Excise, Bolpur -vs- Ratan Melting and Wire Industries - [(2008) 13 SCC 1]. On the legal proposition enunciated therein, there can be no dispute. But the question in the instant case is, even if the said Government Order is eschewed without going into the validity of the same whether the objection raised by the 9 petitioner is necessary to be looked into by this Court at this juncture when the petitioner has participated in the process and has approached this Court only when his bid is rejected.
8. In that regard, in order to contend that when the contention of violation of statutory provision is urged, the participation in the process cannot be a bar to raise the issue as there can be no estoppel against law, the learned counsel for the petitioner has relied on the decision in the case of Inder Sain Mittam vs. Housing Board, Haryana and others [(2002)3 SCC 175] wherein while considering the grounds for setting aside the award under the Arbitration Act, it was held that when the ground is based upon breach of mandatory provision of law, a party cannot be estopped from raising the same in his objection to the award, even after he participated in the arbitration proceedings in view of the well settled maxim that there is no estoppel against statute. It is also held that if however the basis for ground of attack is violation of such a 10 provision of law which is not mandatory but directory and raised at the initial stage, the illegality, in appropriate case may be set right. But, in such an eventuality, if a party participated in the proceedings without any protest, he would be precluded from raising the point in the objection after making of the award. The learned counsel for the respondent on the other hand has relied on the decision in the case of Spanco Tele Systems and Solutions Ltd vs. The State of Karnataka and ors (2008 (2) KCCR 788) wherein while considering the issue relating to the tender process under the KTPP Act and where it was contended that the Constitution of the Tender Scrutiny Committee was not as required under the Act and Rules, it is held that the petitioner having participated in the tender process, cannot feign ignorance of the Constitution and the appointment of the authority or the committees and the rejection of the petitioner's bid cannot be said to be vitiated. Further, on placing reliance on the decision of the Hon'ble Supreme Court, it has also been held therein that every wandering from the precise path of 11 best practice cannot lend fuel to claim for judicial review and it should be made only when there is an overwhelming public interest in entertaining the petition.
9. In the background of the said legal position, firstly it is to be noticed that the phrase adopted in Rule 28A is "two stage tender system may be adopted". Therefore, keeping in view the nature of the project, such provision is made to enable the Tender Inviting Authority to adopt the two stage tender system as a departure from the "Two Cover Tenders" provided in Rule-28 of the Rules which is mandatory as the word employed therein is 'shall'. In that view, if in a tender invitation, a particular process has been followed, and more particularly when the provision provides a discretion as being directory and the Government order is relied, firstly the mandatory requirement as having been violated so as to vitiate the entire process cannot be accepted in a circumstance where the petitioner has participated in the process and is raising the issue for 12 the first time before this Court after his tender was rejected. In fact this position has also been held in the decision referred to by the learned counsel for the petitioner himself. In that light, what is also to be noticed is that apart from the petitioner taking note of the invitation for tender and having participated therein, had also participated in the pre-bid meeting held on 08.11.2013. The extract of the queries raised therein is produced at Annexure-R3. The objection relating to the mode of tender system adopted by the respondent has not been raised as an issue by any of the tenderers including the petitioner. Subsequent thereto also, the petitioner has not raised the issue till his technical bid was rejected. In that view, the contention in that regard cannot be accepted at this stage, to vitiate the entire process and jeopardize the process.
10. The next issue which arises for consideration is as to whether the respondents were justified in rejecting the technical bid of the petitioner on the ground that the essential conditions had not been 13 complied. The respondents through their objection statement have contended that the petitioner had not produced documents to indicate that they had undertaken work of building GF + 4 floors with total area not less than 3230 sq. mts and the self declaration that the petitioner had not been blacklisted by any Government department/PSU had not been uploaded. The learned counsel for the petitioner however contended that the petitioner had submitted the certificates for having undertaken the required work which are dated 18.08.2011, 28.12.2011, 17.01.2013, 21.03.2012, 23.12.2008 and 30.12.2010 and the volume of work undertaken had been mentioned therein. The learned counsel for the respondent would however contend that though such certificates were produced, none of the certificates indicated that the work undertaken was the construction of the GF + 4 floors and in fact the certificate dated 17.01.2013 issued by Maiyas specifically indicates that the construction was of GF + 2 upper floors. The said documents have been taken note of by the Tender 14 Scrutiny Committee in its meeting held on 04.12.2013 and since the documents produced by the petitioners did not meet the requirement, the tender of the petitioner being "non-responsive" was rejected. The committee also found that the self declaration for not having been blacklisted is not uploaded. The proceedings of the Tender Scrutiny Committee is produced at Annexure-R.4 to the petition.
11. The learned counsel for the respondents in that regard has relied on the decision in the case of Ramana Dayaram Shetty vs. International Airport Authority of India and others [(1979)3 SCC 489]; in the case of Dalith Verg Jankalyan Samithi and another vs. Hindustan Petroleum Corporation Ltd, Chandigarh and others (AIR 1997 P.& H. 147 - DB) and in the case of Jagtar Singh vs. Hindustan Petroleum Corporation and others (AIR 1995 P & H 265 - DB) to contend that it has been held that the conditions stipulated should be scrupulously followed and that there can be no departure and also that in the 15 latter two decisions, even the non-filing of an appropriate affidavit has been held as a non-compliance of the requirement.
12. The perusal of the nature of evaluation made indicates that based on the documents uploaded, it had been tabulated. It is seen that with regard to the fulfillment of essential condition No.II(a)(i) against the name of the petitioner, the certificate produced for construction of GF + 2 floors of 13006 sq. mts. is indicated and on review of the documents, the Tender Scrutiny Committee has resolved that the petitioner's tender be treated as 'non-responsive'. Though the learned counsel for the petitioner at this juncture contends that the petitioners had undertaken construction of GF + 4 floors, no document had been produced with specific details despite the requirement of establishing the nature of construction undertaken being an essential condition and Section 4 of the tender documents providing for the eligibility criteria had also prescribed the same as an essential condition. That 16 apart it is important for the Tender Inviting Authority and the Tender Accepting Authority to know the credentials and past performance of each tenderer even though they may have the technical qualification and may quote a lesser price. It is in that regard the uploading of a self declaration about not being blacklisted is listed as an essential condition. Despite the same, the petitioner had not uploaded a self declaration as required. In hindsight if the petitioner realises the same and if documents are made available at this juncture, the authorities cannot be excepted to deviate and accept the same.
13. The learned counsel for the petitioner however sought to contend that even that be the position, from the very proceedings of the Tender Scrutiny Committee relied on by the respondents, it could be seen that all the tenderers have not been treated in the same manner. It is pointed out that in respect of one other tenderer M/s. NAPC Ltd though the certificate has indicated GF + 10 floors, it is noticed that 17 the area of construction is not mentioned, yet their tender has been held to be 'responsive'. To arrive at such conclusion, the committee has taken into consideration the cost of construction at Rs.36 crores. In that light, it is contended that the certificate dated 28.12.2011 produced by the petitioner for having undertaken the work for M/s P.D.Power Systems shows the total project cost was Rs.38 crores and an assumption should have been made in favour of the petitioner also. Learned counsel for the petitioner has relied on the decisions in the case of Gujarat State Financial Corporation vs. M/s. Lotus Hotels Pvt. Ltd [(1983)3 SCC 379]; in the case of Kumari Shrilekha Vidyarthi and others vs. State of U.P. and others [(1991)1 SCC 212] and in the case of Karnataka State Forest Industries Corporation vs. Indian Rocks [(2009)1 SCC 150] wherein it is held that even in case of contractual matters relating to State and its authorities, the judicial review of State action would include to examine violation of Article 14 to find out whether there is arbitrariness or discrimination since 18 the Government and its instrumentalities are in a dominant position.
14. Having noticed the contentions and the decisions relied on, the legal position that the eligibility criteria should be satisfied and the essential conditions stipulated should be fulfilled is no more res-integra. In the instant case, keeping in view the nature of the project and the volume of work that was to be performed, a specific eligibility condition of the tenderer having constructed a RCC framed structure building of GF + 4 floors with a total area of not less than 3230 sq. mts. was indicated and when it has been emphasized in the tender documents, the same was an essential requirement to qualify. The petitioner has produced one document which indicates GF + 2 floors which has been taken into consideration, but the same does not fulfill the requirement, while the other certificates do not specify the nature of construction. If in fact the petitioner had constructed GF + 4 floors, the petitioner should have taken care to produce the same when it 19 was sought as essential requirement. Though the learned counsel for the petitioner contends that in the pre-bid meeting, it was enquired as to whether the plans are to be submitted and they were informed that it would be taken into consideration while finalizing the tender, the queries raised does not appear to be on this aspect of the matter, but the drawings referred to therein is in respect of the building that was to be constructed for the respondents in terms of the tender. That apart, as noticed, the declaration relating to blacklisting has admittedly not been produced except contending that in the format it has been mentioned as 'not applicable'. The same does not meet the requirement.
15. In that context, the question is as to whether there is discrimination and arbitrariness in the manner of consideration of the documents of the different tenderers. Undisputedly, the cost of construction alone cannot determine the height of the building or the area occupied by the building since it would depend on the 20 materials and accessories used and also the nature of the construction, including design and aesthetics. Therefore, the petitioner having undertaken a construction, the cost of which was Rs.38 crores alone was not sufficient for assuming the height of construction consisting of particular number of floors. On the other hand, though the Technical Scrutiny Committee while assessing the documents of M/s. NAPC Ltd has taken into consideration the cost of construction also to arrive at the opinion that the area of construction is more than 3230 sq. mts., what is important to be noticed is that it has also taken into consideration the height of the building being GF + 10 floors and the cost of construction which was substantiated by documents. When the height of the building constructed had been established by production of documents, the technical experts would be competent enough to assess the area that would be occupied by a construction of that height and in that context, if they have opined that it is more than 3230 sq. mts., it is naturally a part of the evaluation process 21 by experts and it cannot be considered as being arbitrary or discriminatory when it is seen that the Tender Scrutiny Committee consists of a Chairman and six members who are all technically qualified. In such circumstance, when the petitioner has not taken care to meet the essential eligibility criteria by producing the requisite documents and when the tender process is at the stage of finalization, the mere contention that the financial bid of the petitioner is Rs.18.69 crores as against the bid of another tenderer at Rs.19.23 crores alone cannot be a consideration to upset the entire process when the petition did not qualify for opening of financial bid, as it would also affect the project which is undertaken on international funding and it would therefore not be in public interest.
In that view, the petition lacks merit and the same is accordingly dismissed. No costs.
Sd/-
JUDGE akc/bms