Karnataka High Court
Swastik Cement Udyog vs Manaing Director on 29 January, 2020
Author: S G Pandit
Bench: S.G. Pandit
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 29TH DAY OF JANUARY 2020
BEFORE
THE HON'BLE MR.JUSTICE S.G. PANDIT
WRIT PETITION NO.106787 OF 2019 (GM-TEN)
BETWEEN
SWASTIK CEMENT UDYOG
A PARTNERSHIP FIRM,
REPRESENTED BY ITS PARTNER,
MADHUSUDHAN MALU,
S/O LATE RAMAGOPAL,
AGED ABOUT: 41 YEARS, OCC: BUSINESS,
R/O OPP. MICO SEEDS, P.B. RAOD,
KAMDOD, TQ: RANEBENNUR,
DIST: HAVERI. ...PETITIONER
(BY SRI.RAJASHEKHAR V.BURJI, ADVOCATE)
AND
1. MANAING DIRECTOR
HUBLI ELECTRICITY SUPPLY COMPANY LTD.,
(HESCOM),
CORPORATE OFFICE, NAVANAGAR,
P.B. ROAD, HUBBALLI,
TQ: HUBBALLI, DIST: DHARWAD.
2. HUBLI ELECTRICITY SUPPLY COMPANY LTD.,
(HESCOM), CORPORATE OFFICE
NAVANAGAR, PB ROAD, HUBBALLI,
TQ: HUBBALLI, DIST: DHARWAD,
REPRESENTED BY
2
SUPERINTENDING ENGINEER ELE,
TENDERING AND PROCUREMENT,
CORPORATE OFFICE,
NAVANAGAR, P.B. ROAD,
HUBBALLI, TQ: HUBBALLI,
DIST: DHARWAD.
3. M/S. PKS PRESETRESSED CONCRETE
PRODUCTS
SY.NO.265/1, P.B. ROAD,
DODDABATHI, DAVANAGERE,
DIST: DAVANAGERE. ...RESPONDENTS
(BY SRI.B.S.KAMATE, ADVOCATE FOR R1 & R3,
SRI.DINESH M.KULKARNI, ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE PROCEEDINGS OF THE TENDER SCRUTINY
COMMITTEE DATED 25.01.2019 OF THE 2ND RESPONDENT,
INSOFAR IT RELATES TO RANEBENNUR DIVISION PRODUCED
AT ANNEXURE-"A"; AND DIRECT THE RESPONDENT NO.1
AND 2 TO CONSIDER THE REPRESENATION DATED
02.03.2019 PRODUCED AT ANNEXURE-F.
THIS WRIT PETITION COMING ON FOR ORDERS, THE
COURT MADE THE FOLLOWING:
ORDER
The petitioner, unsuccessful bidder, is before this Court under Article 226 of the Constitution of India praying for the following reliefs:
"a) Quash the proceedings of the Tender Scrutiny Committee dated 25.01.2019 of the 2nd 3 Respondent, in so far it relates to Ranebennur Division produced at Annexure-A.
b) Direct the Respondent No.1 and 2 to consider the representation dated 02.03.2019 produced at Annexure-F."
2. Brief facts of the case are that the petitioner, which is a partnership firm, is manufacturers of PSC- RCC Poles & Allied Cement Products. The 2nd respondent, under tender notification bearing INDENT No.HESCOM/2018-19/IND.491 to 512 dated 24.11.2018 invited tenders in two covers system of Division wise for 22 division, for manufacture and supply of 8 mtr/9 mtr. RCC and PSC Poles on rate contract basis for a period of two years through E-tender portal of Government of Karnataka. The last date for submission of tender was 08.01.2019 and opening of the technical bid was on 09.01.2019. In the meanwhile, the 2nd respondent issued a corrigendum dated 28.12.2018 amending the pre-qualifying requirement criteria. In the notification 4 published on 24.11.2018, the following was the prequalification:
"The bidder should have pole manufacturing unit located within the HESCOM jurisdiction. Relevant document indicating the location of manufacturing unit shall be uploaded"
Subsequently, by a corrigendum, the following was replaced in the place of the above:
"The bidder who is approved Vendor of HESCOM in Karnataka are also eligible to participate in the Tender. The bidder is required to upload valid Vendor approval of HESCOM."
3. It is the case of the petitioner that being fully eligible and possessing Vendor approval for manufacturing and supply of PSC/RCC poles, the petitioner submitted his bid for Ranebennur division. It is stated that the technical bid of all the Divisions were opened on 09.01.2019 and division wise bidders list was prepared to evaluate the pre-qualification. The technical 5 evaluation was prepared and the same was placed before the Tender Scrutiny Committee on 21.01.2019. The Tenders Scrutiny Committee on evaluation, considered the bid of the 3rd respondent as responsive bid. According to the petitioner, 3rd respondent was not eligible and qualified to participate in the tender process as he did not possess the Vendor approval by HESCOM, which is a precondition/pre-qualification to participate in the tender process. Therefore, the petitioner is before this Court in this writ petition praying to quash the decision of Tender Scrutiny Committee dated 25.01.2019 wherein it held that the 3rd respondent's tender is responsive tender and for a direction to consider his representation dated 02.03.2019.
4. On 08.03.2019, when the writ petition was listed for preliminary hearing, emergent notice was ordered and stay as prayed by the petitioner was granted. The interim order sought for by the petitioner was "Stay of all further proceedings in pursuance of the tender 6 notification dated 24.11.2018." On appearance, the respondents/HESCOM filed its objections contending that there is no merit in the writ petition. Further, the respondent/HESCOM stated that technical bid was opened on 09.01.2019 and financial bid of the successive bidders was opened on 04.02.2019. Thereafter on 05.03.2019, letter of intent was issued to respondent No.3 and a detailed purchase order was placed on 08.03.2019. It is stated that the Tender Scrutiny Committee, after detailed evaluation, considered the bid of respondent No.3 as responsive. It further stated that 3rd respondent had Vendor approval which lapsed on 22.12.2018 and the 3rd respondent had applied for its renewal on 04.01.2019, which was under process. It is stated that, in view of the stay order dated 08.03.2019, the further proceedings have been stalled.
5. Learned counsel for respondent No.3 submits that 3rd respondent had Vendor approval which expired on 22.12.2018 and on 04.01.2019, 3rd respondent had made 7 an application for renewal and the same was pending. Subsequently, vendor approval was renewed on 08.03.2019 Therefore, it cannot be said that 3rd respondent had no Vendor approval at all. Thus, prays for dismissal of the writ petition.
6. Heard the learned counsel for the petitioner, learned High Court Government Pleader as well as learned counsel for respondent No.3.
7. Learned counsel for the petitioner would submit that accepting the tender of 3rd respondent as responsive tender is wholly illegal as the 3rd respondent had no qualification for participating in the tender as on the last date of submitting the tender, since he had no Vendor approval from HESCOM. Possessing Vendor approval from HESCOM was a mandatory requirement for a tenderer to participate in the tender process. Therefore, he submits that the acceptance of tender of respondent No.3 is wholly illegal. Since he is the next 8 lowest tenderer, the tender process should continue from the stage of occurrence of flaw and the tender shall be awarded to the next lowest tenderer. It is his submission that Rule 21 of the Karnataka Transparency in Public Procurements Rules, 2000 requires the Tender Accepting Authority to evaluate the tenders strictly in accordance with evaluation criteria indicated in the tender document. Rule 24 requires Tender Inviting Authority to strictly carry on initial examination of tender documents and if found not substantially responsive, the same shall be rejected by Tender Accepting Authority.
8. It is the submission of the learned counsel for the respondent/HESCOM that 3rd respondent is the lowest tenderer and in the interest of public, his tender is accepted as responsive tender. It is not the case of the petitioner that 3rd respondent had no Vendor approval from HESCOM at all. The 3rd respondent had Vendor approval, but the same had expired on 22.12.2018. Subsequently, an application was made by respondent 9 No.3 for renewal. On consideration of the said renewal application, the Vendor approval was granted to 3rd respondent on 08.03.2019.
9. Learned counsel for respondents No.1 and 2 filed a memo dated 29.01.2020, which reads as under:
"As per the instructions vide letter dated 28.01.2020, the Respondent/HESCOM would withdraw the Tender Notification bearing indent No.HESCOM/2018- 19/IND.497 dated 24.11.2018 in respect of Ranebennur Division considering the requirement of poles to the flood affected area of Ranebennur Division and in the interest of public, with liberty to call for/invite fresh Tenders in respect of Ranebennur Division. Hence, this memo in the interest of justice."
Since, the tender period was for two years and already more than one year three months has elapsed, the respondents No.1 and 2 have taken a decision to 10 withdraw the tender notification in question, with liberty to call for fresh tenders in respect of Ranebennur division.
10. Learned counsel for the petitioner submits the same cannot be accepted, since the tender process had to be continued from the stage where the flaw is noticed, relying on the decision of this Court reported in ILR 2007 KAR 226 in the case of THE KARNATAKA POWER CORPORATION LIMITED v/s SICAL LOGISTICS LIMITED AND OTHERS.
11. The facts are not in dispute in this case. It is an admitted fact that the Vendor approval of 3rd respondent had expired on 22.12.2018 and he had made an application for renewal of the same on 04.01.2019. Considering the said renewal application, the Vendor approval was renewed on 08.03.2019. Respondent No.3 is the lowest bidder having quoted Rs.2,91,47,900/- whereas the petitioner had quoted Rs.3,61,62,339/-. The respondents 1 and 2 have filed the memo dated 11 29.01.2020 to withdraw the tender notification bearing No.HESCOM/2018-19/IND.497 dated 24.11.2018, which is the subject matter of this writ petition, with liberty to call for fresh tenders in respect of Ranebennur division. The said memo requires to be accepted in the interest of public. Nearly one year three months has elapsed from the date of tender notification dated 24.11.2018. The tender period is for two years. It is not the case of the petitioner that he is the next lowest tenderer. Further he is not in a position to say as to whether he is the next lowest tenderer after respondent No.3. The decision cited by the petitioner referred to supra indicates that the petitioner therein had approached the Court with definiteness that he is the lowest bidder and ignoring his bid, another bid was accepted. In those circumstances, this Court had directed to proceed from the stage where flaw had occurred. In this case, more importantly by the time this Court granted interim order on 08.03.2019, as per the statement of respondents No.1 and 2, the 12 respondents had already issued letter of intent on 05.03.2019 and purchase order on 08.03.2019. If the letter of intent is issued accepting the bid of the 3rd respondent, the petitioner has to avail remedy available under Section 16 of the Karnataka Transparency in Public Procurements Act, 1999. Now, the question of appeal would not arise since the respondents No.1 and 2 have taken a decision to withdraw the tender notification in question with liberty to issue fresh tender.
12. Respondents 1 and 2-Tender inviting authority has taken a decision to withdraw the tender notification dated 24.11.2018 and call for fresh tender in respect of tender work relating to Ranebennur Division. The said decision cannot be termed as arbitrary. In tender matter, exercise of the power of the judicial review would be called for if the approach of the authorities is arbitrary or malafide or procedure adopted is meant to favour one. In the instant case, no malafides are attributed. Evaluation of the tender and award of contract are commercial 13 transactions. If decision is bonafide and is in public interest, the court should be slow in exercise of the power of judicial review. If there is some procedural error of assessment, judicial review cannot be invoked to protect the private interest over public interest. In this background, memo filed by the respondents 1 and 2 communicating decision to withdraw the tender notification INDENT No.HESCOM/2018-19/IND.491 to 512 dated 24.11.2018 in respect of Ranebennur Division with liberty to invite fresh tender is accepted and the writ petition is disposed of as the same would not remain for consideration.
Sd/-
JUDGE Kms/mpk/-*