IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF APRIL 2019 PRESENT THE HON’BLE MR.L.NARAYANA SWAMY ACTING CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR WRIT APPEAL No.1043/2019 (GM-RES) BETWEEN:
M/S. BAHWAN CYBER TEK PVT. LTD., 148, RAJIV GANDHI SALAI (OMR) OKKIYAM, THORAIPAKKAM CHENNAI-600 097 REPRESENTED BY ITS DIRECTOR MR.V.M. MURALIDHARAN ... APPELLANT (BY SHRI. M. DHYAN CHINNAPPA, SENIOR ADVOCATE FOR SHRI. B.R. NISCHAL DEV, ADVOCATE) AND:
1. GENERAL MANAGER CREDIT MONITORING AND REVIEW DEPARTMENT, SYNDICATE BANK CORPORATE OFFICE 2ND FLOOR, GANDHINAGAR BENGALURU-560 009 2. THE DIRECTOR E-PROCUREMENT TECHNOLOGIES LIMITED B 705, WALL STREET-II OPP-ORIENT CLUB, NR.GUJARAT COLLEGE ELLIS BRIDGE, AHMEDABAD-380 006 GUJARAT, INDIA ... RESPONDENTS (BY SHRI. ASHOK HARANAHALLI, SENIOR ADVOCATE FOR SHRI. R. SUBRAMANYA, ADVOCATE FOR R1;
VIDE ORDER DATED 16.04.2019- NOTICE TO R2 IS DISPENSED WITH;
SHRI. G. KRISHNA MURTHY, SENIOR ADVOCATE FOR SHRI. PERIKALA K. ARJUN, ADVOCATE FOR PROPOSED R3) THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 25/03/2019 PASSED BY THE LEARNED SINGLE JUDGE OF THIS HON'BLE COURT IN WP NO.6603/2019 AND ALLOW THE WRIT PETITION.
THIS WRIT APPEAL, HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 23.04.2019, COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, P.S.DINESH KUMAR J, PRONOUNCED THE FOLLOWING:-
J U D G M E N T This writ appeal is directed against order dated March 25, 2019 passed by the Hon’ble Single Judge in W.P.No.6603/2019.
2. For the sake of convenience, parties are referred as per their status in the writ petition.
3. Syndicate Bank (‘Bank’ for short) invited tender bids for implementation of ‘early warning signals’ software solution for monitoring of SMA Accounts. Second respondent acted as an intermediary and conducted the e-auction. Petitioner and Price Water House Coopers (‘PWC’ for short) qualified in the technical bid. Financial bids were finalized by ‘reverse auction’ held on January 31, 2019. PWC’s offer was accepted. Feeling aggrieved, petitioner filed the instant writ petition.
4. The Hon'ble Single Judge held that e-tender process did not suffer from any infirmity warranting interference under Article 226 of the Constitution of India. However, liberty was reserved to the petitioner to submit its offer to the Bank with a direction to consider the same in accordance with the terms and conditions of the Request for Proposals (‘RFPs’ for short). Hence, this writ appeal.
5. Shri.Dhyan Chinnappa, learned Senior Advocate arguing in support of this appeal contended that the e-auction process consisted of three stages namely, ‘technical evaluation’, ‘online sealed bid’ and ‘reverse auction’. However, after technical evaluation, the Bank chose to finalize the financial bid directly through reverse auction process and thus the second stage of presenting online sealed bid was given a go-by. Further, contrary to terms of RFP, Bank informed petitioner on January 31, 2019 that reverse auction would be conducted on the same day at 4.00 p.m. Both petitioner and PWC participated in the reverse auction. The tender bid got reduced from `.5.40 Crores to `.3.80 Crores offered by PWC. Petitioner desired to submit an offer less than PWC. However, the said bid did not get registered due to technical error. He contended that both due to procedural lapse and technical failure, petitioner’s case which is more meritorious has not been considered. He argued that the Hon’ble Single Judge failed to consider that the Bank did not follow the procedure prescribed in the RFP. Though petitioner has submitted its representation by availing the liberty granted by the Hon’ble Single Judge, the Bank did not choose to hold another round of negotiation. Awarding the contract to PWC will result in loss to public exchequer. Accordingly, he prayed for allowing this appeal.
6. Shri Ashok Haranahalli, learned Senior Advocate for the Bank submitted that, Bank had an option to choose reverse auction to finalize the financial bid. Bank has notified petitioner on January 30, 2019, that reverse auction was scheduled for the next day. Petitioner has confirmed the receipt of demo and conveyed that it would participate in the reverse auction. With regard to the process of bidding, he submitted, that normally, one hour time slot is provided during reverse auction. However, three extensions of 10 minutes each can be granted and the same were granted. Thus, reverse auction process was completed in 90 minutes. The process began at 16.00 hrs. and ended at 17:29:59.040 hrs. with the last bid submitted by PWC. He further submitted that even if, petitioner’s grievance with regard to technical failure is accepted, petitioner did not convey the same immediately but chose to send an e-mail at 9.21 P.M. requesting to conduct a fresh reverse auction. Even in the said e-mail, petitioner did not convey its offer.
7. Shri. Haranahalli further submitted that the EWS software solution is very crucial and bank has been instructed by the Reserve Bank of India to complete the process at the earliest. Bank has already awarded the tender to PWC on April 9, 2019. Though the writ petition was disposed of on March 25, 2019, petitioner chose to submit its representation on April 10, 2019.
8. In substance, Shri Haranahalli submitted that petitioner having participated in the tender process, has not been diligent. Therefore, its conduct must disentitle the petitioner from any relief by this Court in exercise of extraordinary jurisdiction under Article 226 of the Constitution which is also discretionary in nature. Accordingly, he prayed for rejecting this appeal.
9. Shri G.Krishnamurthy, learned Senior Advocate for PWC adverting to Clause 9.5.2 of RFP submitted that participants were requested not to wait till the last moment to quote their bids to avoid any complex situations. Petitioner has not placed any material to substantiate its contention with regard to technical failure. The bank has followed a very transparent method and rightly awarded the work to PWC. Accordingly, he also prayed for rejecting this appeal.
10. We have carefully considered the rival contentions and perused the records.
11. The principal contention urged by Shri Dhyan Chinnappa is that petitioner was desirous of quoting less than PWC and accordingly, made its effort.
However, its bid did not get registered due to technical failure. The Bank being a public sector undertaking ought to have considered to hold a second e-auction or in the alternative, considered petitioner’s representation submitted pursuant to the liberty granted by the Hon’ble Single Judge. Awarding tender in favour of PWC at higher cost results in loss to public exchequer.
12. Indisputable facts of the case are, bidding commenced at 14.00 hours on January 31, 2019. The bids were presented in following manner:
13. Thus, the last bid was presented by PWC at 17:29:59.040 hrs. and the same has been accepted. Though reverse auction was concluded at 17.30 hrs., petitioner has sent following e-mail at 9.21 P.M.:
“From: Chandrakumar Natarajan[nchandru@bahwancybertek.com Sent: 31, Jan, 2019 9:21 PM To:
co.cmrd@syndicatebank.co.in;cocmrgm@syndicatebank.co.in Cc: ‘Jaya Vaidhyanathan’ Subject: RE: Procurement of EWS Software Solutions Attachment: Letter_31 January 2019.pdf Enclosed Letter No.EWS/BCT-SYND/2019/3101 dated 31 January 2019 The General Manager SyndicateBank, Corporate Office Credit Monitoring and Review Department Gandhinagar Bangalore-560 009 Ref: No.RFP 0145/CO: CMRD/EWS_Procurement dated 10/12/2018 Pfor Procurement of Early Warning Signals (EWS) System Software with 4 years ATS after warranty period of One Year.
Dear Sir, We wish to place to your kind attention the events of Reverse Auction which could not allow us to place our final bid in the online e-tender system.
As you know, our presentation was over by 3:30 PM and the reverse auction was scheduled by 4:00 PM which could not give adequate preparation and demo of the reverse auction software application.
Even then we did not want to miss the opportunity and we have participated in Reverse Auction.
However there was lot of software issues in the online e-tender systems in the way we handled it, c) The confirmation message of placing the bid price was on top of clock given the inability to watch the count down.
d) Even though count down was there after the last few seconds the software did not accept our final bid in the reverse auction process. It knocked out us even before the clock becomes Zero.
We request your good office to take into consideration the above challenges faced by us in the online e-tender system and kindly arrange to re-conduct the reverse auction process.”
14. Shri Haranahalli is right in his submission that petitioner did not choose to convey its bid amount immediately after conclusion of reverse auction nor in its e-mail mentioned above.
15. The e-mail sent by the bank (Annexure-R7) shows that bank had notified the petitioner with regard to e- auction a day prior to the date of reverse auction. The e-mail sent by the petitioner (Annexure-R9) clearly shows that it has confirmed receipt of demo and conveyed that it would participate in the reverse auction.
16. Clause 9.4 in the RFP requires a bidder to convey any failure of system immediately. The relevant clause reads as follows:
“9.4 In the event of failure of Systems/Connectivity at the Bidders end (due to any reason whatsoever it may be) 9.4.1. It is the Bidders responsibility/decision to send fax communication immediately to Service Provider furnishing the bid price, they want to bid online, with a request to upload the faxed bid price online so that the service provider will upload that price online on behalf of the Bidder.”
17. Further, bidders have been requested not to wait till the last minute in the RFP. The relevant clause reads as follows:
“9.5.2 Bidders are requested not to wait till the last moment to quote their bids to avoid any such complex situations.”
18. A careful analysis of facts of this case leads to an irresistible inference that there is no lapse on the part of the Bank. So far as petitioner’s claim with regard to technical failure is concerned, admittedly, it has not conveyed the same to the Bank immediately. Further, petitioner has submitted its representation nearly fifteen days after disposal of the writ petition.
19. In view of the above discussion, we find no error in the impugned order and we are at one with the view expressed by the Hon’ble Single Judge. Resultantly, this appeal fails and it is accordingly dismissed.
No costs.
In view of dismissal of the appeal, all pending interlocutory applications stand disposed of.
Sd/-
ACTING CHIEF JUSTICE Sd/- JUDGE Yn.