Karnataka High Court
Government Of Karnataka vs Knowledge Infrastructure System ... on 25 June, 2013
Bench: K.L.Manjunath, L.Narayana Swamy
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 25TH DAY OF JUNE 2013
PRESENT
THE HON'BLE MR.JUSTICE K.L. MANJUNATH
AND
THE HON'BLE MR.JUSTICE L. NARAYANASWAMY
W.A. NO.4148 OF 2009 c/w
W.A. NO.2868 OF 2009 (GM-RES)
BETWEEN :
IN W.A. NO.4148 OF 2009
1. GOVERNMENT OF KARNATAKA
THROUGH ITS PRINCIPAL SECRETARY
VIDHANA SOUDHA, BANGALORE
2. GOVERNMENT OF KARNATAKA
FINANCE DEPARTMENT
THROUGH ITS SECRETARY
VIDHANA SOUDHA, BANGALORE
... APPELLANTS
(BY M.KESHAVA REDDY, AGA)
AND :
1. KNOWLEDGE INFRASTRUCTURE
SYSTEM PVT. LTD
HAVING ITS REGISTERED OFFICE AT
A-2/22, SAFIDARJUNG ENCLAVE
NEW DELHI - 110 029
ALSO AT:
No. 41-42, A-WING, MITTAL COURT
NARIMAN POINT
MUMBAI-400 021
2
REPRESENTED BY ITS DIRECTOR
BUSINESS DEVELOPMENT
MR. K. RAMAN
2. KARNATAKA POWER CORPORATION LTD.,
No.82, SHAKTHI BHAVAN, 2ND FLOOR
RACE COURSE ROAD
BANGALORE-560 001
REPRESENTED BY ITS
MANAGING DIRECTOR
3. MMTC LIMITED
REPRESENTED BY ITS
CHAIRMAN AND MANAGING DIRECTOR
HAVING ITS REGISTERED OFFICE AT
SCOPE COMPLEX, 7TH FLOOR, CORE-1
7-INSTITUTIONAL AREA, 3
LODI ROAD, NEW DELHI-110 003
HAVING ITS REGIONAL OFFICE AT
SHIKSHAK SADAN, GROUND FLOOR
K.G. ROAD, BANGALORE-560 002
... RESPONDENTS
(BY M/S BASAVAPRABHU S PATIL ASSOCIATES
ADV., FOR R1 (SRI VIVEK HOLLA, ADV. FOR R2)
BETWEEN :
IN W.A. NO.2868 OF 2009
KARNATAKA POWER CORPORATION LTD.,
No.82, SHAKTHI BHAVAN
2ND FLOOR, RACE COURSE ROAD
BANGALORE-560 001
REPRESENTED BY TIS MANAGING DIRECTOR
... APPELLANT
(BY M/S HOLLA AND HOLLA, ADV.,)
3
AND :
1. KNOWLEDGE INFRASTRUCTURE
SYSTEM PVT. LTD
HAVING ITS REGISTERED OFFICE AT
A-2/22, SAFIDARJUNG ENCLAVE
NEW DELHI - 110 029
ALSO AT:
No. 41-42, A-WING, MITTAL COURT
NARIMAN POINT
MUMBAI-400 021
REPRESENTED BY ITS DIRECTOR
BUSINESS DEVELOPMENT
MR. K. RAMAN
2. GOVERNMENT OF KARANATAKA
THROUGH ITS PRINCIPAL SECRETARY
VIDHANA SOUDHA, BANGALORE
3. GOVERNMENT OF KARNATAKA
FINANCE DEPARTMENT
THROUGH ITS SECRETARY
VIDHANA SOUDHA
BANGALORE
4. MMTC LIMITED
REPRESENTED BY ITS
CHAIRMAN AND MANAGING DIRECTOR
HAVING ITS REGISTERED OFFICE AT
SCOPE COMPLEX, 7TH FLOOR, CORE-1
... RESPONDENTS
(BY M/S BASAVAPRABHU S PATIL ASSOCIATES
ADV., FOR C/R1 AND SRI KESHAVA REDDY, AGA FOR
R2 AND R3)
***
4
THESE WAs ARE FILED UNDER SEC.4 OF THE
KARNATAKA HIGH COURT ACT, PRAYING TO SET ASIDE
THE ORDER PASSED IN WRIT PETITION No.12533/2008
DATED 03.07.2009, ETC.,
THESE APPEALS COMING ON FOR FINAL HEARING
THIS DAY, THE COURT DELIVERED THE FOLLOWING:-
JUDGMENT
The legality and correctness of the order passed by the learned Single Judge in W.P. No.12533/2008 dated 03.07.2009 in directing the appellants herein to pay cost of Rs.25,000/- to the respondent No.1, is called in question in these appeasl.
2. The facts leading to these appeals are as hereunder:
The respondent No.1 - Knowledge Infrastructure Systems Pvt. Ltd, is the writ petitioner. The writ petition was filed to declare Section 4 (g) of the Karnataka Transparency in Public Procurement Act, 1999 (in short 'the Act') as unconstitutional and invalid; to quash the notification dated 24.07.2008 vide Annexure-J; notification dated 02.08.2008 vide Annexure-K issued by 5 the Government of Karnataka, Finance Department under Section 4 (g) of the Act; to quash the decision taken by KPCL to follow an open competitive and transparent tendering process for the supply of coal for its power generation projects.
3. According to petition averments, the writ petitioner is a company incorporated under Companies Act, 1956 carrying on the business of import and distribution of steam coal for power plants, cement plants and steel plants.
4. Karnataka Power Corporation Limited, an undertaking of Government of Karnataka, is engaged in generation of energy. Respondent - MMTC Limited, is Government of India enterprises wholly owned by the Government of India.
5. The tender was floated by KPCL on 31.05.2008 for import and supply of 6 lakh metric tons of steam coal for its Raichur Thermal Power Station for a period of six months. The writ petitioner was one of the 6 tenderer. The tender was awarded to another company known as M/s Bhatia International Ltd. Coal was to be supplied to the petitioner from the middle of September 2008.
6. In the meanwhile, KPCL has placed an order for supply of coal from respondent No.4 - MMTC Limited, a Government of India undertaking, on the ground that there is an urgent need to buy steaming coal and that tender was awarded to M/s Bhatia International Ltd., which would supply coal from later date. The action of the Government was called in question by the appellant on the ground that granting exemption under Section 4 (g) of the Act to procure coal from MMTC Ltd., at first instance 2 lakh metric tons and later 6 lakh metric tons, is bad in law.
7. The learned Single Judge has up held validity of Section 4(g) of the Act. However, he also confirmed decision taken by KPCL to procure 2 lakh metric tons of coal from MMTC Ltd. as per Annexure-J. 7 However, he quashed notification dated 02.08.2008 as per Annexure-K in granting exemption under Section 4(g) of the Act to procure additional 4 lakh metric tons of coal from MMTC. Further direction was issued by the learned Single Judge to procure coal in accordance with the provisions of the Act. While allowing the writ petition the appellants have been directed to pay cost of Rs.25,000/-. Therefore, present appeals are filed.
8. Before adverting to rival contentions, it is brought to our notice by the learned counsel for parties that supply of balance 4 lakh metric tons of coal vide notification dated 02.08.2008 as per Annexure-K is concerned, by the time the order was passed by the learned Single Judge, the MMTC Ltd had already supplied 1.06 lakh metric tons of coal and that the appellants herein have not procured remaining coal as per notification dated 02.08.2008 vide Annexure-K and appellants have not press the appeal in so far as the order passed by the learned Single Judge in quashing notification vide Annexure-K to the extent of non-supply 8 of steaming coal by MMTC Ltd to KPCL. Therefore, their contention is that imposing cost of Rs.25,000/- is untenable and liable to be set aside.
9. Mr. Keshava Reddy, learned AGA appearing for appellants submits that at the first instance writ petition filed by the petitioner was not maintainable in view of the decision taken by the Government as per Annexure-P dated 18.07.2008, wherein the Government has decided not to notify the petitioner for negotiation on account of inferior quality of coal. According to him, the writ petitioner has given three options for supply of coal. Out of which condition Nos. 2 and 3, the writ petitioner would provide coal only in August, September and October, as the same was to reach for KPCL, which would be too late. Therefore, the options given by the petitioner could not be considered. However, in regard to the first option the Government felt that the GCV value of the writ petitioner was less then 6 lakh metric tons and moister content of all the 4 options is more than 30% and that nearly half of the coal was nothing 9 but water which will not give any heat value and on the contrary which affects the boilers. Therefore, option No.1 for supply of coal by the petitioner was not suitable and accordingly, it was decided not to invite the writ petitioner for negotiations.
10. The learned AGA further submits that the appellants had no intention to procure coal contrary to the provisions of the Act. According to him, the learned Single Judge did not consider the fact that on account of extreme emergency as there was no stock of coal in the RTPC due to which the Thermal plant had to come to total halt without production of electricity generation, the order was placed before MMTC Ltd. He contends that the learned Single Judge while quashing the notification Annexure-K did not consider the conduct of the writ petitioner in offering three options as per Annexure-B dated 10.07.2008. Therefore, in such circumstances award of cost of Rs.25,000/- to the appellant was not justified as there was not malafide intention on the part of the appellant in procuring coal 10 from MMTC, an under taking of the Government of India.
11. Further, it is contended if the appellants have procured coal from any private firms or third parties, the court could have found fault with the appellant and not in the circumstances when the order placed is with the enterprises undertaken by the Government of India. He further submits that MMTC has supplied the coal lower than the accepted cost of M/s Bhatia International Ltd. He submits viewed from any angle the learned Single Judge had to appreciate the conduct of the appellants in procuring the coal on the lower rate, but awarded cost.
12. The learned counsel for respondent - writ petitioner contends there was no reason for the KPCL to procure additional coal of 4 lakh metric tons and when they had an opportunity to notify the tender by following the Act, since on account of non-inviting eligible bidders to participate in the tender process, the petitioner was 11 compelled to file the writ petition. Therefore, award of Rs.25,000/- as cost is justifiable and he requests this court no to entertain the appeals.
13. Having heard the learned counsel for parties and considering the background of these cases, we are of the view that no malafide could be pointed out to the appellants herein since they have procured the required coal from an undertaking wholly owned enterprises of the Government of India and in addition to that as rightly pointed out by the learned AGA that writ petitioner has not challenged the decision of the Government dated 18.07.2008, wherein it is decided not to invite the writ petitioner for negotiations considering inferior quality of coal supplied by him.
14. In the circumstances, we are of the opinion that award of cost of Rs.25,000/- has to be set aside, as no malafide could be found with any of the Officers of the Government. Accordingly, we allow these appeals to 12 the extent of setting aside the imposition of costs of Rs.25,000/- on the appellants.
SD/-
JUDGE SD/-
JUDGE VK