Karnataka High Court
Schenck Process India Limited vs Bangalore Metro Rail Corporation Ltd., on 16 August, 2012
Bench: Chief Justice, Aravind Kumar
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 16TH DAY OF AUGUST 2012
PRESENT
THE HON'BLE MR.VIKRAMAJIT SEN, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
WRIT APPEAL No.4280/2012(GM-TEN)
BETWEEN:
SCHENCK PROCESS INDIA LIMITED
HAVING ITS REGISTERED OFFICE AT EM 26
AMIT TOWERS, 6TH FLOOR
SALT LAKE CITY,SECTOR-V
KOLKATA 700 091. ... APPELLANT
(BY SRI. A.MURALI, ADV. FOR
J.SAGAR ASSOCIATES, ADV.)
AND
BANGALORE METRO RAIL CORPORATION LTD.,
A JOINT VENTURE BETWEEN THE GOVERNMENT
OF INDIA AND THE GOVERNMENT OF
KARNATAKA
HAVING ITS REGISTERED OFFICE AT
III FLOOR, BMTC COMPLEX
K.H.ROAD, SHANTHINAGAR
BANGALORE - 560 027
REPRESENTED BY ITS
MANAGING DIRECTOR ... RESPONDENT
(BY SRI UDAYA HOLLA, SR.COUNSEL A/W.
SRI N.N.HARISH, ADV. FOR M/S.AAREN ASSTS.,)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE
ORDER PASSED IN WRIT PETITION No.26105/12 DATED
30.07.2012.
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THIS WRIT APPEAL COMING ON FOR PRELIMINARY
HEARING THIS DAY, CHIEF JUSTICE DELIVERED THE
FOLLOWING:
JUDGMENT
VIKRAMAJIT SEN, C.J. (Oral) :
This Appeal assails the order of the learned Single Judge dated 30.07.2012 in WP No.26105/12. The Writ Petition prayed for quashing of the letter dated 17.07.2012 of Bangalore Metro Rail Corporation Ltd., rejecting the petitioner's tender for "Design, Supply, Installation, Testing and Commissioning of Bogie Test Stand" for Baiyappanahalli and Peenya Depots
2. One of the conditions required furnishing of a Tender Guarantee in the sum of Rs.9,00,000/-. The Tender Guarantee was to be in a prescribed form (Appendix FT-1) to the `Form of Tender' and it was clarified that any tender not accompanied by an acceptable tender guarantee shall be rejected by the purchaser. Subsequently, a corrigendum came to be issued which, so far as the Tender Guarantee is concerned, stipulated as follows:
"The tenderer shall submit with his Tender a Tender Guarantee for a sum as specified in Appendix FT-1 to Form of Tender in the form of a Bank guarantee issued from an Indian Scheduled bank (excluding Cooperative Banks) or from a Scheduled Foreign Bank as defined in Section 2(e) of RBI Act, 1934 read with Second Schedule drawn on and payable at 3 branch at Bangalore only in the form given in Annexure-1 to ITT to the Instruction to Tenderers. The Tender Guarantee shall remain valid for a period as specified in Appendix FT-1 to Form of Tender".
3. Although five parties had evinced an interest in the subject matter of the tender only four parties participated, responded out of which two were found to be non-compliant. So far as, Cyclosystem PTE Ltd. is concerned the Tender Guarantee was drawn on DBS Bank Ltd., Singapore, and since it was found not "to be drawn on and payable at branch at Bangalore only", it came to be rejected. The other party is the petitioner/appellant in respect of whom it was similarly found that the bank guarantee was of State Bank of India, Tupudana Branch, Ranchi for sum of Rs.9.00,000/- and did not fulfill the tender stipulations. The Tender Guarantee is avowedly furnished by State Bank of India, Tupudana Branch, Hatia, Ranchi and contains the following additions to the form prescribed in the Tender:
"a) Our liability under this guarantee shall not exceed Rs.9,00,000/- (Rupees Nine lakhs only);
b) This Bank Guarantee shall be valid upto 27.04.2013; and
c) We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee only and only if you serve upon us a written claim or demand on or before 27.06.2013".4
4. The tender documents were opened and scrutinized on 16.07.2012 at 15.30 hours at which point, admittedly on pointing out by a rival party, it was noticed that the Tender Guarantee was neither drawn nor payable by a Bank at Bangalore. It is also not in dispute that a communication was received from the State Bank at 17.35 hours on 16.07.2012 stating that "we confirm that the above mentioned guarantee is payable at any branch at Bangalore", but by this time the petitioner's bid had been held to be discrepant.
5. So far as any enquiry into a tender dispute is concerned, the decision in Tata Cellular, (1994 (6) SCC 651 = AIR 1996 SC 11) still remains instructive and Para.69 requires reproduction.
"69. A tender is an offer. It is something which invites and is communicated to notify acceptance. Broadly stated, the following are the requisites of a valid tender:
1. It must be unconditional.
2. Must be made at the proper place.
3. Must conform to the terms of obligation.
4. Must be made at the proper time.
5. Must be made in the proper form.
6. The person by whom the tender is made must be able and willing to perform his obligations.
7. There must be reasonable opportunity for inspection.
8. Tender must be made to the proper person.5
9. It must be of full amount."
It will be evident that if the tender document is not filed at the proper time or is not in the proper form it requires to be rejected. It is also relevant to reiterate that the jural inspection or adjudication should be restricted to the adherence of the conditions and procedure prescribed for in the tender, and not the ultimate decision taken by the authority concerned. Thus, even though the tender was in possession of a valid and active ISO certificate the Supreme Court declined to interfere with the rejection of the tender on the ground of its nonfiling in Glodyne Technoservice Ltd., vs. State of Madhya Pradesh (2011) 5 SCC 103. Monarch Infrastructure (P) Ltd., vs. Commissioner, Ulhasnagar Municipal Corporation (2000) 5 SCC 287 and Rajashekar Gogoi vs. State of Assam (2001) 6 SCC 46 which lay down the same principle of law. In Purvankara Projects Ltd. vs. Hotel Venus International (2007) 10 SCC 33, their Lordships have cautioned against importing and applying public or administrative principles in the realm of contracts/tenders.
6.In M/s.G.J.Fernandez vs. State of Karnataka (AIR 1990 SC 958) it has been clarified that if an interpretation of the standards prescribed is bona fide, the Court would not interfere with that interpretation and would abjure from 6 superimposing its own preferred opinion thereon. To the same effect is the celebrated decision in Wander Ltd. vs. Antox India P.Ltd., (1990 Supp.SCC 727) "The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd., v. Pothan Joseph: (SCR 721) "....These principles are well established, but as has been observed by Viscount Simon in Charles Osenton and Co., v. Jhanaton'... the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case."
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7. The learned Single Judge referred to the conditions applicable to the Tender Guarantee, which we have reproduced above, and has come to the conclusion that the only conclusion that can be arrived at on a perusal thereof is that subject guarantee was not drawn, and more importantly, was not payable at Bangalore. The fact that subsequently a clarification was received did not persuade the learned Single Judge to find that the rejection of the appellant's tender was not in consonance with law. There are several judgments which have been rendered by the Hon'ble Supreme Court as well as the Division Benches of High Courts of India indicating the parameters of judicial interference in decisions pertaining to tenders and adverting to all of them would make these orders needlessly and avoidably prolix;, we shall therefore abjure from doing so.
8. On 10.8.2012, we had passed the following order:
"We have heard learned counsel for the parties and perused the documents on record.
Our attention has been drawn to Clause C8.1 which stipulates the furnishing of a Tender Guarantee. It appears that this clause was amended on 24.05.2012 with a clarification that the Tender Guarantee should be "drawn on and payable at branch at Bangalore only". It further appears that on scrutinising the documents on 16.07.2012, on the submission made by the Representative for LAN Railtech Private Limited, a decision was taken by the Respondent that the Tender 8 Guarantee of the Appellant did not meet the requirements. According to the Appellant, a clarificatory letter had been submitted to the Respondent after 5.30 p.m. on 16.07.2012 to the effect that the subject Bank Guarantee was "payable at any branch at Bangalore". We have perused the Bank Guarantee and it does not state that it is payable only at the place of issue, which learned counsel for the Respondent has assiduously submitted is in Ranchi. There are four interested parties in the tender out of which, two have been rejected. So far as the Appellant is concerned, we are prima facie of the view that a hyper- technical objection has been taken which may lead to the conclusion that it was intended only to snuff out competition. For a public concern such as the Respondent, any inference in this regard should be quelled at the earliest opportunity.
We have asked learned counsel for the Respondent whether a course should be chartered other than passing orders restraining further progress of the tender proceedings. His contention is that the Respondent has taken the correct approach.
A copy of the impugned order is not available on record, as it is stated not to have been released as yet. However, counsel for the parties state in unison that the reason which prevailed on the learned Single Judge to reject the Writ Petition was on the discrepancy of the Tender Guarantee, on the lines argued by learned counsel for the Respondent. Issue notice returnable for 16.08.2012.
Mr.Harish N.N., Advocate for M/s.AAREN Associates, Advocates accepts notice on behalf of the Respondent.
Counsel for the Respondent prays for a short adjournment to take instructions.
Renotify on 16.08.2012."9
9. Learned Sr.Counsel who appears for the respondents states on the strength of the statement of objections filed today that because the tender documents were returned to the appellant, the entire exercise would be impossible to repeat, since the technical bids of parties is now common knowledge. It justifies reiteration that the Tender Guarantee drawn on a Bank in Singapore has been rejected. The words "drawn on" should not be glossed over. Admittedly, the Tender Guarantee supplied by the appellant has not been drawn on a Bank in Bangalore. Furthermore, we find no perversity in the conclusion drawn by the learned Single Judge that the three additions made by the petitioner in the Tender Guarantee are inexorably indicative that the Tender Guarantee was not even payable at Bangalore.
10. Participation in tenders has now become a highly specialized activity. All parties have to meticulously comply with all the terms published and prescribed in that regard. The appellant, we are satisfied, is discrepant for two reasons firstly, the tender guarantee is avowedly not drawn on a Bank at Bangalore and secondly that a prudent perusal would show that it was also not payable at Bangalore either. 10
11. For these reasons, we do not find merit in the appeal. The appeal is dismissed with no order as to costs.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE Sk/-