IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF FEBRUARY 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.8174 OF 2019 (GM-TEN) BETWEEN:
M/S KARAM CHAND THAPAR & BROTHERS (COAL SALES) LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS LOCAL HEAD OFFICE AT BUX RANKA HOUSE N R SQUARE OTC ROAD BENGALURU – 560 002 REP. BY ITS DEPUTY GENERAL MANAGER.
(By Mr. M NAGAPRASANNA SR. COUNSEL FOR Ms. SUVARNA M L, ADV.) AND:
KARNATAKA POWER CORPORATION LIMITED SHAKTHI BHAVAN 3RD FLOOR BENGALURU – 560 001 REP. BY ITS MANAGING DIRECTOR.
(By Mr. UDAY HOLLA SR. COUNSEL FOR Mr. AJAY J NANDALIKE, ADV.) - - -
… PETITIONER … RESPONDENT THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR THE ENTIRE RECORDS LEADING TO THE ISSUANCE OF TENDER NOTIFICATION DATED 08.11.2018 AND ETC., THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Mr.M.Nagaprasanna learned Senior counsel for Ms.Suvarna M.L., learned counsel for the petitioner.
Mr.Uday Holla, learned Senior counsel for Mr.Ajay J.Nandalike, learned counsel for the respondent.
2. The writ petition is admitted for hearing.
With consent of the parties, the same is heard finally.
3. In this petitioner under Articles 226 & 227 of the Constitution of India, the petitioner inter alia seeks quashment of pre bid modifications made to the tender notification dated 8.11.2018. In order to appreciate the petitioner’s challenge to the impugned modifications, few facts need mention, which are stated hereinafter.
4. The petitioner is engaged in the business of liaisoning, movement, handling and delivery of raw coal from the coalfields to thermal power stations either by rail route or rail-sea-rail route for several decades and has been awarded contracts on several occasions. It is averred in the writ petition that during the subsistence of the contract with the petitioner, a tender notification was issued by the respondent on 24.05.2018. The petitioner submitted a representation on 13.06.2018 for cancellation of the aforesaid tender notification. However, on 08.11.2018, another tender notification for liaisoning movement, handling and delivery of raw coal from Mahanadi coal fields ltd., Talcher in the State of Odisha to Raichur Thermal Power Station / Bellary thermal power station in the State of Karnataka by rail- sea-rail route. It is pleaded in the writ petition that a lot of clarification were submitted by the tenderers in the pre-bid meeting and pre-bid clarifications are uploaded by the respondents. However, it is averred that in the garb of pre-bid clarification, the respondent herein has materially altered several conditions of the tender clauses pertaining to eligibility of the tenderers, which amounts to amendment of the tender notification on 10.01.2019 with a view to help certain tenderer. The petitioner thereupon submitted a detailed representation on 29.01.2019. However, the representation submitted by the petitioner failed to evoke any response and date of opening of financial bids was fixed as 19.02.2019. In the aforesaid factual backdrop, the petitioner has approached this Court.
5. Learned Senior counsel for the petitioner submitted that Notice Inviting Tender was issued on 08.11.2018 and one pre-bid clarification meet was held on 27.11.2018, whereas, another pre-bid clarification was made on 20.12.2018. It is further submitted that the respondents were well within their rights to issue clarifications but could not be permitted to alter the conditions in the Notice Inviting Tender pertaining to eligibility criteria. It is submitted that the modifications in the Notice Inviting Tender have been issued suo motu and the conditions of eligibility in the Notice Inviting Tender have been changed to favour a particular tenderer. It is also submitted that being aggrieved, the petitioner submitted a representation. However, no action was taken on the representation. In support of aforesaid submissions, reference has been made to decisions of Supreme Court in ‘MICHEGAN RUBBER (INDIA) LTD., VS. STATE OF KARNATAKA AND OTHERS’, (2012) 8 SCC 216 AND ‘MUNICIPAL CORPORATION UJJAIN AND ANOTHER VS. B.V.G. INDIA LTD., AND OTHERS’, (2018) 5 SCC 462.
6. On the other hand, Learned Senior Counsel for the respondents submitted that KPCL had floated the tender for transportation of coal. Rule 14 of Karnataka Transparency Public Procurements Rules, 2000 (hereinafter referred to as ‘the Rules’ for short) as well as Clause 4.05 of the NIT, empowers the respondent to issue pre-bid clarifications even suo motu. It is also pointed out that pre-bid clarifications were uploaded on 09.01.2019. The petitioner submitted its bid on 16.01.2019 with his eyes wide open and therefore, the petitioner is estopped by conduct from contending at this point of time that in the garb of pre-bid clarifications, the respondent cannot be permitted to alter the terms and conditions of the Notice Inviting Tender. It is also pointed out that thereafter on 19.01.2019, the technical bids were opened and this petition was filed on 15.02.2019. It is further submitted that the Notice Inviting Tender in question as an element of public interest as the respondent to seek to procure the coal as there is a shortage of coal in the State of Karnataka. It is also urged that under Rule 14 of the Rules, the respondent has the authority to make any change in the tender condition. It is argued that this Court in exercise of powers under Article 226 of the Constitution of India would interfere in contractual matter only when there is an overwhelming public interest is involved and not because legal point is made out. It is also urged that even if procedural abrasion or error is made out the Court will not interfere if the award of contract is in public interest and tendering authority has discretion to set eligibility criteria and scope of interference with the terms and conditions of the contract is extremely limited. In support of aforesaid submissions, reliance has been placed on decisions of Supreme Court in ‘RAUNAQ INTERNATIONALK LTD., VS. I.V.R. CONSTRUCTION LTD. AND OHTERS’, (1999) 1 SCC 492, ‘ MASTER MARINE SERVICES (P) LTD. VS.L METCALFE & HODGKINSON (P) LTD. AND ANOTHER’, (2005) 6 SCC 138, ‘MUNICIPAL CORPORATION, UJJAIN AND ANOTEHR VS. BVG INDIA LIMITED AND OTHERS’, (2018) 5 SCC 462, ‘ELECTRONIC ENTERPRISES VS. KARNATAKA POWER CORPORATION LTD.,’, ILR 1994 KAR 125, ‘MICHIGAN RUBBER (INDIA) LIMITED VS. STATE OF KARNATAKA AND OTHERS’, (2012) 8 SCC 216 and ‘SUNEETA AGGARWAL VS. STATE OF HARYANA AND OTHERS’, (2000) 2 SCC 615 and decision of this Court in ‘K.NARAYANA BHAT AND OTHERS VS. MANGALORE ELECTRIC SUPLY COMPANY LIMITED (MESCOM), MANGALORE’, 2013 SCC ONLINE KAR 10399 and order dated 07.04.2013 passed in ‘M/S KANARA TECHNICAL AND OTHERS VS. MANGALORE ELECTRICITY SUPPLY COMPANY (MESCOM) LTD., AND ANOTHER in W.P.Nos.6638- 6647/2013.
7. I have considered the submissions made on both the sides and have perused the record. Before proceeding further it is apposite to take note Rule 14 of the Rules, which is reproduced below for ready reference:
“14.Clarification to tender documents – At any time after the issue of the tender documents and before the opening of the tender, the Tender Inviting Authority may make any changes, modifications or amendments to the tender documents and shall send intimation of such change to all those who have purchased the original tender documents.”
From perusal of Rule 14 of the Rules it is evident a that any time of issue of tender documents and before opening the tender the tender inviting authority may make any changes, modifications or amendments to the tender document. Thus, it is evident that under Rule 14 the tender inviting authority has the power to make any changes, modifications or amendments to the tender documents. Thus, the contention of the petitioner that in the garb of pre bid clarification, the respondent has no authority to make any changes in the tender document is sans substance.
8. It is pertinent to note that pre-bid clarifications were uploaded on 09.01.2019 and the petitioner submitted its bid on 16.01.2009 without any demur. Thereafter, the technical bids were opened on 19.01.2019 and the writ petition was filed on 15.02.2019. The petitioner, therefore, in the facts of the case is estopped from his conduct from raising the contention that the respondent could not have changed the terms and conditions of the Notice Inviting Tender.
9. Besides that, for yet another reason, no interference is called for in the instant writ petition. The scope of interference of this court in exercise of powers under Article 226 of the Constitution of India is delineated by a catena of decision of the Supreme Court. It is well settled in law that discretion to grant largesse including award of jobs, contracts, quotas, license and so on must be structured by rational, relevant and non-discretionary standard or norms. If the Government departs from such standard or norms, its action would be liable to be struck down unless the Government can establish that departure was not arbitrary, but was based on some valid principles which in itself was not irrational, irrelevant, unreasonable or discriminatory (See: NARENDRA KUMAR MAHESHWARI VS. UNION OF INDIA, 1990 (SUPP) SCC 440): (AIR 1989 SC 2138). It is equally well settled legal proposition that it is open to the State to prescribe conditions in the tender, prescribing the eligibility criteria and if the State can justify the tender conditions in the context of particular contract, the Courts will not interfere and whenever there are different alternatives, it is not for the courts to suggest that a particular alternative is justified. IN awarding contract, the public interest is of paramount consideration and there should be no arbitrariness in awarding the contract and all participants in the tender process must be treated alike. IN the celebrated case of ‘TATA CELLULAR VS. UNION OF INDIA (1994) 6 SCC 651: (AIR 1996 SC 11), the Supreme Court while dealing with the scope of judicial power of review held that it would apply to exercise of contractual powers by Government bodies in order to prevent arbitrariness or favoritism. It has been held that the ground upon which the administrative action is subject to control by judicial review is on the grounds of illegality, irrationality and procedural impropriety. It has further been held that terms of the invitation to tender are not open to judicial scrutiny because invitation to tender is in the realm of contract and more often than not, such decision are made qualitatively by experts. It has further been held that the Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative body functioning in an administrative sphere or quasi- administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness but must be free from arbitrariness not affected by bias or actuated by mala fides.
10. The principles regarding award of contract were again reiterated by the Supreme Court in ‘IN DIRECTOR OF EDUCATION VS. EDUCOMP DATAMATICS LIMITED’, (2004) 4 SCC 19: (AIR 2004 SC 1962) and it was held that Government must have a free had in setting the terms of tender and the Courts cannot strike down the terms of tender prescribed by the Government because it feels that some other terms in the tender would have been fairer, wiser or more logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or actuated by malice. In ‘SHAMNIT UTSCH INDIA PRIVATE LIMITED VS. WEST BENGAL TRANSPORT INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED’, (2010) 6 SCC 303: (2010 AIR SCW 3974), the Supreme Court while taking note of the law laid down in ASSN. OF REGISTRATION PLATES VS. UNION OF INDIA’, (2005) 1 SCC 679: (AIR 2005 SC 469), reiterated that State Government has the right to get the right and most competent person and in the matter of formulating conditions of tender documents, unless the action of tendering authority is found to be malicious and is a misuse of statutory powers, the tender conditions are unassailable. In ‘SIEMENS AKTIENGESELEISCHAFT AND SEIMENS LIMITED VS. DELHI AND SEIMENS LIMITED VS. DELHI METRO RAIL CORPORATION LIMITED AND OTEHRS’, (2014) 11 SCC 288 : (AIR 2014 SC 1483), it was held that tenders floated by the Government are amenable to judicial review only in order to prevent arbitrariness and favoritism and protect the financial interest of the State and the public interest. Thus, the scope of judicial review is confined as to whether there was any illegality, irrationality or procedural impropriety committed by the decision making authority. It has further been held that the court cannot sit in appeal over the soundness of the decision made by the competent authority and the Court can only examined whether the decision making process fir, reasonable, transparent and bonafide with no perceptible injury to public interest. In ‘CENTRE FOR PUBLIC INTEREST LITIGATION VS. UNION OF INDIA’, (2016) 6 SCC 408; (AIR 2 916 SC 1777) has held minimal interference is called for by the Court of Judicial Review with a decision taken by the technical experts after due deliberations inasmuch as the Courts are not well equipped to fathom into such domain which is left to the discretion of the executive. It has further been held that primary and secondary purpose of review is to ensure that administrative bodies act in efficient, transparent, fair, unbiased manner and keep in forefront public interest. Similar view has been taken in ‘TANGEDCO VS. CSEPDI – TRISHE CONSORTIUM’, (2017) 4 SCC 318: (AIR 2016 SC 4879) AND SAM BUILT WELL (P) LTD. VS. DEEPAK BUILDERS (2018) 2 SCC 176: (AIR 2018 SC 44).
11. In view of aforesaid enunciation of law, no interference in the fact situation is called as no element of public interest is involved in this case, the tender has been issued for transportation of coal and in case the proceeding are stalled the public interest would be adversely affected.
In view of preceding analysis, I do not find any merit in the writ petition, the same fails and is hereby dismissed.
Sd/- JUDGE SS