Karnataka High Court
De La Rue International Limited vs Bank Note Paper Mill India Private ... on 1 August, 2018
Author: Aravind Kumar
Bench: Aravind Kumar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 01ST DAY OF AUGUST, 2018
BEFORE
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
WRIT PETITION NO.31259/2018 (GM-TEN)
BETWEEN:
DE LA RUE INTERNATIONAL LIMITED
A COMPANY INCORPORATED IN
ENGLAND & WALES,
HAVING ITS REGISTERED OFFICE
AT DE LA RUE HOUSE,
JAYS CLOSE, VIABLES,
BASINGSTOKE,
HAMSPHIRE RG22 4BS,
UNITED KINGDOM,
REP. BY ITS AUTHORISED SIGNATORY
...PETITIONER
(BY SRI.PRAMOD NAIR, ADVOCATE)
AND:
BANK NOTE PAPER MILL INDIA
PRIVATE LIMITED
ADMINISTRATIVE BUILDING,
PAPER MILL COMPOUND,
ENTRY GATE 1, NOTE MUDRAN NAGAR,
MYSURU-570 003
REP. BY ITS MANAGING DIRECTOR
...RESPONDENT
(BY SRI. SHYAMA SUNDAR H.V., ADVOCATE)
2
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF CONSTITUTION OF INDIA PRAYING TO
DECLARE THAT ANY LIMITED TENDER ISSUED BY THE
RESPONDENT AFTER 8 MAY 2017 FOR PRODUCTS
COVERED BY THE EOI DOCUMENT IS INVALID; ETC.,
THIS PETITION COMING ON FOR PRELIMINARY
HEARING IN 'B' GROUP THIS DAY, THE COURT MADE THE
FOLLOWING:
ORDER
Petitioner has sought for the following reliefs:
(a) declare that any limited tender issued by the Respondent after 8 May 2017 for products covered by the EOI Document is invalid.
(b) issue a writ of mandamus directing the Respondent to refrain from inviting or issuing any limited tender for products covered by the EOI Document'
(c) issue a writ of mandamus directing the Respondent to cancel any limited tender already issued after 8 May 2017 for products covered by the EOI Document and refrain from awarding any contract on the basis of such limited tender;
(d) issue a writ of mandamus directing the Respondent to decide on the bids 3 submitted pursuant to the EOI Document in a time-bound manner;
(e) issue any other appropriate writ, order or direction that it deems fit in the circumstances of the case.
2. Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (for short hereinafter referred to as 'RBI') issued an Expression Of Interest (hereinafter referred to as 'EOI' for short) on 05.04.2017-Annexure-A for procuring "Colour Shift Security Thread" with magnetic properties and micro-text for incorporation in Cylinder mould vat made Watermarked Bank Note paper. The last date for submission of bids was 08.05.2017. Petitioner is said to have submitted its bid pursuant to said notification. In all, 7 applications for pre-qualification of bidders for the expression of interest was received, amongst whom petitioner was one. Subsequently, for about 14 months after opening of the bids tender was not awarded. A communication dated 22.06.2018 is said to have been received by the petitioner from RBI intimating that enquiry relating to expression of interest has stood 4 transferred to Bank Note Paper Mill India Pvt. Ltd. (for short referred to as respondent), which is a joint venture company promoted by Security Printing and Minting Corporation of India Ltd., New Delhi and Reserve Bank of India, which is wholly owned by Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (RBI) and Security Printing and Minting Corporation of India Ltd., which is owned by Government of India. As such petitioner was intimated that all further communication can be addressed to respondent. Hence, petitioner forwarded a communication dated 28.06.2018-Annexure-C to the respondent enquiring as to whether any fresh information is to be furnished by it or whether any fresh EOI is being published. This was followed by a reminder dated 10.07.2018-Annexure-D addressed to respondent. Petitioner was informed on 11.07.2018- Annexure-E by respondent that respondent is awaiting information from RBI pertaining to petitioner's organization and was informed that on receipt of such information, petitioner would be intimated further. Subsequently, on 23.07.2018 petitioner has been 5 informed by the respondent that bid submitted by petitioner was not considered by evaluation committee as petitioner did not have valid security clearance as per qualifying criteria. In other words, petitioner was informed that it was not pre-qualified for tender for procurement of Colour Shift Security Thread. This intimation having been received by the petitioner during the pendency of petition, same is also assailed by the petitioner.
3. I have heard the arguments of Sri.Pramod Nair, learned counsel appearing for petitioner and Sri.P.S.Rajagopal, learned Senior Counsel appearing on behalf of Sri.Shyama Sundar H.V. for respondent. Perused the case papers.
4. The contention of petitioner can be crystalised as under:
Respondent has not adopted fair play and fair opportunity has not been extended to petitioner; though petitioner possessed security clearance without any intimation as to its suspension petitioner has been 6 excluded from the impugned Notification and thereby there is violation of principles of natural justice;
communication relied upon by the respondent dated 21.09.2016 purported to have been received by the Government of India, has not been intimated to the petitioner and as such, if respondent intends to rely upon a document, which was never intimated to petitioner, respondent ought to have followed the principles of natural justice; petitioner had been informed by respondent by communication dated 22.06.2018 that its bid was valid and there was no necessity to resubmit fresh offer and as such respondent had no qualms or dispute about there being any deficiency in the documents furnished by the petitioner and as such petitioner could not have been denied participation in the tender process. On these grounds, Sri.Pramod Nair, learned counsel appearing for petitioner by relying upon the following judgments seeks for quashing of the impugned notification and prays for grant of consequential relief as sought for in the writ petition.7
(i) (1975) 1 SCC 70: M/S. ERUSIAN
EQUIPMENT & CHEMICALS LTD. vs.
STATE OF WEST BENGAL AND
ANOTHER
(ii) 2012 SCC ONLINE DEL 3267: GLOBAL
VECTRA HELICORP vs. DIRECTORA
GENERAL OF CIVIL AVIATION AND
ANOTHER
(iii) (1998) 1 SCC 229: RAGHUNATH THAKUR vs. STATE OF BIHAR AND OTHERS
5. Per contra, Sri.P.S.Rajagopal, learned Senior Counsel appearing for respondent would submit that petition is liable to be dismissed on the ground of non- joinder of necessary parties, inasmuch as, respondent has only taken over from the stage of evaluation having been completed by RBI and if at all petitioner has any grievance prior to same for excluding petitioner from furnishing of tender documents by virtue of non adherence to the conditions stipulated under the expression of interest, same has to be addressed before the appropriate authority and respondent herein would have no role whatsoever in the said process. He would also elaborate his submission by contending that 8 respondent was not involved in the evaluation of expression of interest submitted by bidders or shortlisting of the applicants and it has only taken over the outcome of expression of interest as per the decision taken by the Joint Procurement Committee (JPC)/Reserve Bank of India, which was conveyed to the respondent herein by RBI under communication dated 19.06.2018-Annexure-R1. He would further contend that on 26.06.2018 Regulate Rate Contract tender came to be issued to all those applicants, who participated in the EOI and who were pre-qualified/shortlisted and security cleared and respondent to meet its immediate requirement of having security thread for manufacturing currency paper/bank note paper and as such, there is no infirmity or illegality committed by the respondent for this Court to exercise extraordinary jurisdiction.
6. He would also submit that validity of tender is different from acceptability of tender and merely because under communication dated 22.06.2018- 9 Annexure-B, RBI had informed the petitioner about the validity of bid submitted by the petitioner, would not mean that bids submitted by the petitioner has been accepted. Relying upon following judgments, he seeks for dismissal of the writ petition.
(i) AIR 1964 SC 1140: INDO-CHINA STEAM NAVIGATION CO. LTD. vs. JASJIT SINGH, ADDITIONAL COLLECTOR OF CUSTOMS, CALCUTTA AND OTHERS
(ii) (2014) 5 SCC 409: EX-ARMYMEN'S PROTECTION SERVICES PRIVATE LIMITED vs. UNION OF INDIA AND OTHERS
(iii) AIR 1986 SC 555: SATYAVIR SINGH AND OTHERS vs. UNION OF INDIA AND OTHERS
7. Having heard the learned Advocates appearing for parties and on perusal of records it requires to be noticed that EOI in question was called for by RBI i.e., Bharatiya Reserve Bank Note Mudran Pvt. Ltd. in order to enlist the bidders, who would be providing 'Colour Shift Security Thread', which is used for being incorporated in the note printer being used for 10 printing of notes by respondent namely, for printing of Indian currency notes for being supplied to RBI for circulation.
8. It is in this background, conditions stipulated in the tender notification will have to be perused namely, in EOI at Annexure-A, which would disclose that under Chapter-III-Qualifying Criteria it is specifically indicated as to what would be the qualification criteria, which must be fulfilled by the intending fIrms apart from experience, past performance, capability, equipment and manufacturing facilities, financial standing and security requirements and same is amplified in Clause (vi) of EOI and it reads as under:
• The Bidder should have valid security clearance from Government of India in the sector of Currency/Coin/Passport proposal of RBI/SPMCIL/BRBNMPL/ BNPMIPL for any of the security products.
• The Bidder should not be in a list of blacklisted/debarred firms from any Government Agency anywhere in the world and the Bidders shall be 11 required to submit the declaration to that effect.
(Emphasis supplied by me)
9. Even in the preamble of EOI it is clearly and specifically indicated that EOI has been invited from such of those persons, who are security cleared. In the matter of printing of currency notes utmost security is to be maintained, which is the minimum requirement for which proposition no doubt can be expressed, inasmuch as, economy of a country would depend upon the circulation of valid currency or legal tender and infraction of same even at micro level may have disastrous consequence on the economy of this country. It is in this background contents of expression of interest is perused and same would disclose the conditions indicated thereunder has to be necessarily complied with by the applicant for being short listed and under the expression of interest in question, procuring agencies are required to procure or furnish or deliver "Colour Shift Security Thread" with magnetic properties and micro-text for incorporation with CWBN Paper. 12 These aspects would have gone into by experts at the time of formulating the expression of interest and neither this Court nor other authorities would have the expertise to decide the correctness or otherwise of such technical details. As noticed hereinabove, in the matter of national security which would also include the economic security of the country and there should be strict adherence to the conditions. As to whether there is compliance of the condition or not would be examined in the background of conditions stipulated in the expression of interest in question.
10. Hon'ble Apex Court under similar circumstances in the matter of EX-ARMYMEN'S PROTECTION SERVICES PRIVATE LIMITED vs. UNION OF INDIA AND OTHERS reported in (2014) 5 SCC 409 while considering a plea of alleged violation of principles of natural justice where an army personnel came to be dismissed from the inapplicability of rules of natural justice came to be examined and it was held that natural justice is a principle of universal application 13 and persons whose interest are to be affected by decisions, adjudicative and administrative should receive a fair and unbiased hearing before decisions are made. It is held that said principle is traceable to fundamental rights under Part III of the Constitution. Whether any reasonable restriction or limitation or exception to this principle would be permissible in the interest of national security, it was held as follows:
"16. What is in the interest of national security is not a question of law. It is a matter of policy. It is not for the court to decide whether something is in the interest of State or not. It should be left to the Executive. To quote Lord Hoffman in Secy. of State for Home Deptt v. Rehman ((2003)1 AC 153) "... [in the matter] of national security is not a question of law. It is a matter of judgment and policy. Under the Constitution of the United Kingdom and most other countries, decisions as to whether something is or is not in the interests of national security are not a matter for judicial decision. They are entrusted to the executive."
17. Thus, in a situation of national security, a party cannot insist for the strict observance of the principles of natural justice. In such cases, it is the duty of the Court to read into and provide for statutory exclusion, if not expressly provided in the rules governing the field. Depending on the 14 facts of the particular case, it will however be open to the court to satisfy itself whether there were justifiable facts, and in that regard, the court is entitled to call for the files and see whether it is a case where the interest of national security is involved. Once the State is of the stand that the issue involves national security, the court shall not disclose the reasons to the affected party.
In fact, while examining the expression 'national security', Hon'ble Apex Court in its authoritative pronouncement, has held that it would also include socio political stability, territorial integrity, economic solidarity and etc.
11. It is in this background, respondent herein which is successor in interest to RBI in the matter of EOI in question has continued with the process and found that while transmitting the successful applications to it, name of the petitioner has been excluded. Respondent neither had any role in the matter of excluding the petitioner nor for the first time after such applications were transferred to the respondent, petitioner's application has been excluded. 15 Hence, no fault can be laid at the doors of respondent herein.
12. It is no doubt true that in the endorsement or communication dated 23.07.2018 - Annexure-R-2, petitioner has been intimated about its non-inclusion or non-furnishing of bid document was due to the reason that valid security clearance from the Evaluation Committee has not been furnished. In the words of respondent, reason assigned for petitioner not having been furnished with tender document is to the following effect:
"We have been intimated by BRBNMPL that your bid was not considered by the evaluation Committee as you did not have valid security clearance as per the qualifying criteria."
By communication dated 19.06.2018 RBI has handed over the bids to the respondent herein and while transferring the bids submitted by the bidders to the respondent pursuant to impugned Expression Of Interest, it would disclose the name of petitioner is reflected at Sl.No.6 in Table A (under head 'bids 16 submitted by supplier'). However, under Table B (under head 'letters related to security clearances') while evaluating security clearance, it has opined that security clearance is withheld by the Government of India vide letter dated 21.09.2016 and this has been attacked by Mr.Nair, learned Advocate appearing for petitioner as being in violation of principles of natural justice. As to whether communication dated 21.09.2016 from the Government of India has been received by the petitioner or whether petitioner has been intimated of such decision by Government of India or whether prior notice has been issued to petitioner before issuing said communication are not at all in the domain of this Court to be examined since that is not the scope of present writ petition since it is not under challenge. If on the ground of non-clearance of security, petitioner has been excluded, it is for the petitioner to assail the said order in appropriate proceedings and as such, this court would not delve upon as to whether there is infraction of principles of natural justice before issuance of communication dated 19.06.2018-Annexure-R-1 and 17 no opinion is expressed for want of pleadings as well as the authority which has issued said communication not being a party to the present proceedings. In that view of the matter, without expressing any opinion in that regard and reserving liberty to the petitioner to assail the same in appropriate proceedings, this Court is of the view that no infirmity can be found in the procedure adopted by the respondent in not permitting the petitioner in participating in the tender process. Hence, petition is liable to be dismissed and accordingly, it is hereby dismissed.
SD/-
JUDGE DR/sp