Karnataka High Court
M/S Bgss Infotech vs State Of Karnataka on 14 October, 2009
Author: Ajit J Gunjal
Bench: Ajit J Gunjal
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 14%: DAY OF OCTOBER--'20fC)]9:_4
BEFORE
THE I~iON'BLE MR. JUSTICE V
WRIT PETITION No. Ios3g'2oo8
WRIT PETITION NO'.i47866/2OO_7"'i{GM~--Res)
II! W.P. N0.1053/2008
BETWEC EN : CS
M/S.BGSS Inf_ote__ch, _ - '
Having its officeat No.58/=9, _
II Floor, Byravesihyvara Coznpieaf
T.Dasarahai1ifi, "Banga}o'1'e}»5'6'0- =o5=7,' '
Represent_eEi.. 'iite. _Ch_ie~f_ Exec: Itiire
sri.La..kshr:IIsh.a M ...PETITIONER
(By M. .sI:aC.$I;::dI;;ar,
M /S.Kesvy .& «Company, Advs .)
V. A' ..... .. y
S' '1:.»Vé 'State :_of.Karnataka.
. "of Infonnation Technology,
S A B'io--TeciiI_1o1ogr, Science and Technology,
50* a;nd'5*~'h Floors, 5"? Phase,
M.:3,B:tu'.1dings, Dr.B.R.Ambedkar Veedhi,
~ Bangalore - 560 001, represented by
v '_ E. Principal Secretary and Chairman,
Karnataka State Electronics
Development Corporation Limited.
» 2. Karnataka State Electronics
Development Corporation Ltd.,
[KEONICSL having its office
at No.29/ 1, Race Course Road,
Bangalore »-- 560 001,
Represented by its
Managing Director and
Director (Operations)
3. Rakesh Singh, I.A.S.,
Managing Director.
Karnataka State Electroriics
Development Corporation'
[KEONICSL Having its offiee'~._
at No.29/ 1, Race Coursefload';
Bangalore -- 560 00-1}} _ g.'.'.RE$G\imNTS
[By SI-i.R..N'~a.ta.I-aj-_--r"1/"'J.£}.'kV-' for
Sri.Nt_8_.Vishig;va1jI ath,-AGA fQr_fR1)
This Writ ipetitioiatgie 'ifiled under Articles 226 and
227 of'their(3tansti?tutionV"of India with a prayer to quash
the :t,OI'd_e-I' " 1:2-.2007 terminating the
mem0rand.uIn. of.':un'defsta--ting dated 26.07.2003 Vide
Annexure. 5S' isaued by the R2.
g In 333.9. eeNo.17'8.:6V:EVli/2007
irzoss 1nfe'tee_h,
No.»58/ ~2"f¢.i Floor,
'V ByraveS'h,wara Complex,
' ~ 5 1 ' ~ . __ ' Dasarah alli,
A vBlai1'gal0re--560 O57,
_ Represented by its CEO
* Si;i.Lakshm:isha ...PETI'I'IONER
[By Sri.H.N.Shashidhara, Adv. for
M/S.KesVy <3: Company, Advs.]
AND:
1. State of Karnataka.
Represented by its
Secretary,
Department of Finance,
Vidhana Soudha, A
Bangalore --- 560 001.
2. State of Karnataka,
Represented by its ,
Secretary, Department of
Information Techn"oi_ogy.~*'"" *
Bio--Technoiogy, _. _ '_
Science and Technology, 'V
M.S.Buildings, t if t "
Bangalore +560 0401, .
3. Ka1'nat.aka.-'State----Elée'tro'ni.c*s
Devei op'm,e'11t\: Qor p,orat'ion .. Ltd 5
(KEONl'CS}._ Nogzo/1A,tt'
Raée Cours'e. Road» , ' .. '
Bangalore W 560; 001, "
Represented by its" _
Managing Dzreetoit. ...RESPONDENTS
atafaj, Adv. for R3,
t _ V V.Sti;'N:B.Vishwanath, AGA for R1 & R2)
'' petition is filed under Articles 226 and
227 of the 'Constitution of India with a prayer to quash
- ..__Wthe no'tiffcation dated 22.09.2007 produced along with
' petition as Annexure 'DD' to this writ petition and
These writ petitions coming on for preliminary
hearing in 'B' Group, this day. the Court made the
following: V.
ORDER
Both these Writ petitions are disposed:
common order.
2. The petitioner is is erstgbiished the year 1995 with the computer education. The Dicieals with the procurernentu Electronic items, IT iéoftware} as well as InforriivatiozitV}l'echnolpo'g§"Consultancy and host of all other allied projVectsv.'.reI:éitwing to Information Technology. 3,.» In w;?;'Ne§i78e0/2007, the claim of the "i4s°~tVhat it has been awarded ISO 9001:2000 ce1*ti1°ic_a~tiolri=Afor providing software development, compiitcr training etc. The case of the petitioner is that nit' eisitempanelled with the Government of Karnataka for ...0tbout six years prior to the institution of the proceedings. Suffice it to say the petitioner and the 31""
respondent herein have entered into a memorandum of understanding (for short 'i\/IOU') on market and to provide relevant Skill Training Programmes and related services and A' Technology and Telecorn-V:'products.' Government Departments.g..i"'TVhne:g the 31"
respondent entered 'V agreement on 26.05.2006,:.iv--h;ich BGSS Infotech dispute that as per the lead partner and the petitioner vvill Implementing Agency. Since the4"'~vproec1i~remen.t was required to be done '--..,acco\rdi.r:.g "T-to the'""'Karnataka Transparency in Public 1999 [for short "Transparency Act'), an was sought under Section 4[g) of the Act. Pursuant to Annexure the rexe_niption under Section 4(g} of the Transparency Act _,,was granted. The contract was awarded to the petitioner 9' and respondent No.3, by the BMTC for procurement of W .r' /./' smart cards. Before anything could happen, a communication was issued at Annexure respondent No.3 informing the petitioner.-that'itordi reasons stated in the said Memorandum of Understandingaiiwouldv Since the contract/agreement to an to the said communicatiori_._.S:Vfinnexufi issued pursuant to which was granted under Section. {fig} Act was withdrawn in favour of the 3rd for a period of four years. aggrieved by the said comrnunication of;-Wi'thVd'raWa1 of applicabiiity of Section «-..4(g}':c_:of stheflfrantsparency Act to the Contract, is before 1053/2008, the petitioner is questioning KW"'4Sgthe'i=-tennination of the contract, a copy of which is produced at Annexure 'S'. Pursuant to Annexure 'S', said contract or the consortium and the % 3' /5' -7- Memorandum of Understanding stood terminated. The said termination is subject matter of this writ _ V
5. The facts narrated are substantialrlyliicomrnon " . both the writ petitions. But:__ however! the petitions, the common .=gr_oundis et}1atl§.'o.nge3 anfl' exemption is given to the con~s,o1'tium,"theV same could "not have been inasmucih as the benefit thereof ought to havgabeen. favour of the petitioners. l A " ll'/Ir.Shash?iVd'ha1',.DlearnedV counsel appearing for the petitioners.in'.~'vbo_t}1.._:thevpetitions would vehemently contend thatl th.er'e llv_;as'"lVno justifiable reason for the ..Vresppind>entsAto terriiinate the contract inasmuch as 30 days-vnpotioeisyyelessential and pre-requisite conditions are Aflbefore any termination takes place. He in-.__"vffurther~~ submits that once the exemption having been under Section 4(g} of the Transparency Act to Annexure the same could not have been lwpwithdrawn unilaterally. He further submits that t
-3» petitioner has spent considerable amount for the project.
7. Mr.R.Natara3', learned pp respondent No.3 submits ciearly indicates that in the_aeventpro'f terms, if a 30 days notice issued that would satisfy the te1'rr}is...of HE submits that the exemption!' 4(g) of the Transparency of the fact that the 3rd Government run unit and it provisions of Section 4 of the Transparency consortium comes to an endp,4;trici..eXemp.tion, was granted in favour of the jvjaaitomatically ceases inasmuch as the fali under any of the categories ciassified' under Section 4 of the Transparency Act. it Mr.N.B.Vishwanath, learned Additional .___"."Government Advocate appearing for respondent No.1 '4'°=su'omits that having regard to the fact that the 3rd fl .. I respondent--iead partner having questioned the competency of the petitioner, was obliged to terrn-inate the contract. Hence, justifies the terrninationim 'TV
9. I have given my anxious" consi_de'rat:1'on"=to~the '* submissions made by the learned cc;unitsei.appeafingp fC!l_' the parties.
10. The MernoraIi.du1n°.'o_f'tfnderpstandyingfl is to be found at Annexure 'B'. about the marketing sti*a'teg*y as weir as Apdwhatis required to be done dea'c.h:i:of parties said MOU. Indeed a perusaI".of the 'clearly disclose that there is an ar'oitraI"~c}V_ause at oiause 19, which would clearly '--._ind-icate'-tthat if tdhereis any dispute or difference of any that would arise between the petitioner and.4"Vresponident No.3, the petitioner is required to the Managing Director of respondent No.3 and it dispute is not settled between the petitioner and Managing Director of the 33" respondent within a it specified time ie, 30 days, the dispute can be referred % to the Arbitrator under the Arbitration and Conciliation Act, 1996 or in the alternate, the petitioner is to approach the Law Courts in Bangalore ~ a statutory notice. I am of the if an arbitral clause in the examining the matter any:'ftirthheria l' unnecessary. Indeed is that dispute has arisen betweent' and the 3m respondent. C_iaiis--_e mandate that the petitioner:,_"--i.s"" approach the Managing Directorlloftofsettie the difference if any, between is placed before this Court to exercise has been done.
;i\l...Shashidhar. learned counsel '-the petitioner in both the petitions finding can be given on the merits of the l ' Jnatters.' Section 4 of the Transparency Act would relate to; the exceptions to the applicability of the fl / .. 11 ,.
Trarzsparency Act. indeed the provisiens of Chapter-ii regarding Reguiatien of Preeurenlent is nee the exceptions enumerated in the _ Indeed for our pU.{'p{}S€, it is neceeeery "~ exemption was gamed 1}.11der:=..:' Transeareney Act. Seetien aef ;
W0u1ti1'ead¥:h:.1e: " R "
"The provisions 'net apply to Procurem_ent of
(g) in resgzreewt of as moczy. from
13. fI1c¥,VeeciVtVi12._eAe§<{e23:1'Lptie:"1 was granted pursuant to ._tZi1e._'S}3.i§l,__Lprevisieh;V-...T?he exemption, which was granted Lb3% i:he 23.03.:200'i' appears to be general in nafufe iI)§iS:33i3{iC1"1 as the preeuremen: is in respect of a '2_Gever11n'ient Agency. Indeed the said exemption is % e~Ieg;%ag17:;:e fer a. period of few years fmm 23.03.2007.
Afiféilexuze 'J' dated 2'?.04.2()G'? is a cemmtmieation '4 issued by the Bangaiere Mef.repe£ii:3.I1 Transperfz Cerperation {fer ehezt BMTC) in respect ef Hiring eg/_ favour of the 3*" respondent for a further period of four years till 23.03.2011 i.e.. the even date exemption, which was granted.
14. Indeed the difference: f.ai*i>s'e.r1'--.':
between the petitioner and question would be whetheriviyiéithis _u'C3oV1irt under Article 226 of the Cons.titLiti'on;V~_of ind.i'§{.Qpou1d'idecide the issue regarding of the parties. Time the contractual obligations the terms would not come the -.226 of the Constitution of India. Ultirnately. if.Vpthe'petitioner in both the petitions V is aggrieved by termination of the contract, it is its remedy addressed elsewhere. The peti'ti.one1*Rcetrtainly cannot try to revive the consortium V -V as vvellt asvthe MOU, the exemption which is Withdrawn. it 'perusal of the exemption as well as the withdrawal
-- and the reason thereby, I am of the view that the withdrawal or the exemption certainly cannot be faulted. The exemption is granted only when a _}5_ a perusal of the said termination would clearly disclose that the 3rd respondent has exercised its right--w:.i1.n'der Clause 21 of the MOU and would stateT"th.at:
necessary and proper to terminate dated C 25.07.2003 with effect from soiiedégzsllrr§r;;oA'the«. dates:
j effect of the notice. Hence, of the.vievv_;th'at'"t'here a proper compliance of Clai.;s'e=2:l the MOU"inasmuch as notice is issued before' the and the MOU was not renews-jdi-.as{contemplatedvnnder Clause 21 of the MOU. 0- 'l_7. ._ in the case of ABL International E-tot?' aificléétznother V/S. Export Credit Gu.q§rdntee Coajioloraition of India Ltd., and others :Arep0Vrted'A..in.:'i2O04]3 SCC 553 has observed that the Well go into the disputed questions of
-' factééllaend interpretation of documents. But however, a }.v{rrit-._petition involving serious disputed questions of ' facts which requires consideration of evidence which is not on record will not normally be entertained under Article 226 of the Constitution of India. I am of the view} .6' -15- that the ease of the petitioner would fall the exceptions as stated by the Apex Court. VVhe:i violation of the terms of the contract, putting the clock back would ncf.-'t'"arise. "f'I'he'j<fi3V1V:];,_* :c'durs'e opera. for the aggrieved parties is t'
18. Having given my eohsidetation, I am of the View that the queeésticin Qfvvif1'terfe'rer1ce in both the writ petitions does not-arise. I K Petitiolnf-3 .r'e;i_ée_ted_.-,, 5;. §