IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF FEBRUARY 2017 BEFORE THE HON’BLE MR. JUSTICE A S BOPANNA WRIT PETITION No.1410/2017 (GM-TEN) BETWEEN:
M/S. KARNATAKA AROMAS A PARTNERSHIP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT, 1932 HAVING ITS REGISTERED OFFICE AT “KCI CHAMBER”, NO.160, 3RD FLOOR, 5TH MAIN ROAD CHAMRAJPET, BANGALORE-560 018 REP. HEREIN BY ITS POWER OF ATTORNEY HOLDER, MR. VIVEK DAYANAND ... PETITIONER (BY SRI. DHYAN CHINNAPPA, SR.ADV. A/W SRI ARUN KUMAR K, ADV.) AND:
KARNATAKA SOAPS AND DETERGENTS LIMITED A GOVERNMENT OF KARNATAKA UNDERTAKING HAVING OFFICE AT NO.27, INDUSTRIAL SUBURB, BANGALORE-PUNE HIGHWAY, RAJAJINAGAR, BANGALORE-55, REP. HEREIN BY ITS MANAGING DIRECTOR ... RESPONDENT (BY SRI. M.R.C. RAVI, ADV.) THIS PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH TENDER DATED 12.10.2016 ISSUED BY THE RESPONDENT AT ANNEX-A AND DIRECT RESPONDENT TO COMPLY WITH THE TERMS OF TENDER DATED 11.03.2016 VIDE ANNEX-B AND DIRECT THE RESPONDENT TO PURCHASE THE REMAINING QUANTITY OF 1,300 KGS OF VETIVERT OIL FROM THE PETITIONER AT THE TENDERED RATE.
THIS WRIT PETITION HAVING BEEN RESERVED FOR ORDERS ON 21.02.2017, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING :
O R D E R The petitioner is before this Court seeking that the Tender Notification No.KSDL/2016-17/IND2765 dated 12.10.2016 issued by the respondent for procurement of Vetivert oil be quashed. In consequence the petitioner is seeking that the respondent be directed to comply with the terms of the earlier tender dated 11.03.2016 and purchase the remaining quantity of 1300 kgs of Vetivert oil from the petitioner.
2. The respondent had issued the tender notification dated 11.03.2016 calling for bid to supply 4800 kgs of Vetivert oil which is used for the soaps manufactured by the respondent. The petitioner's bid at Rs.16200/- being competitive was accepted. The respondent however issued the purchase order dated 17.10.2016 only for the quantity of 3500 kgs. It is stated that the same was limited to that quantity because the Managing Director was authorised only to that extent through one order. The petitioner claims to have supplied the said quantity of 3500 kgs after securing the last shipment on 12.12.2016. The petitioner claims that they were informed that the purchase order for the remaining 1300 kgs would be issued shortly. However, contrary to that position, the respondent issued the impugned tender notification dated 12.10.2016 and finalised the purchase for Rs.32,500/- per kg. The petitioner therefore contending that the supply of the remaining quantity was denied to the petitioner, is before this Court in this petition.
3. The respondents have filed their objection statement. At the outset, it is contended that the petitioner without taking part in the subsequent tender process though it was in the e-procurement portal has approached this Court only after the entire tender process was completed and as such the petition is not tenable. It is also contended that the purchase order placed on the petitioner provides for arbitration in the event of any dispute and as such the instant petition is not maintainable. In so far as the earlier tender process it is contended that, though the notification was for 4800 kgs, the condition at Sl.No.27 provided that the respondent had reserved the right to accept the partial or entire tendered quantity as per the requirement.
4. The respondents further contend that the petitioner was required to supply 400 kgs of each consignment commencing from June 2016 before the completion of the year. It is also their case that though the petitioner supplied 200 kgs on 20.10.2016, the same was defective and hence was rejected. Even thereafter the petitioner had defaulted in meeting the delivery schedule is the contention. In that view, the production schedule of the respondent was also affected. The respondent addressed letters dated 19.09.2016, 21.09.2016 and 04.10.2016. Since the respondents did not choose to take further risk, issued the fresh tender notification, negotiated the price and has procured the same at Rs.16150/- per kg. The purchase order dated 20.01.2017 is issued to M/s. K.K. Aromas. The correspondence at Annexure- R9 to 17 are relied upon to indicate that letters were addressed to the petitioner due to their default.
5. In the light of the above, I have heard Sri.
Dhyan Chinnappa, learned senior counsel for the petitioner and Sri. M.R.C.Ravi, learned counsel for the respondent and perused the petition papers.
6. The fact that the earlier tender notification dated 11.03.2016 was issued calling for bids to supply 4800 kgs of Vetivert oil and pursuant to the same a purchase order was issued to the petitioner only for 3500 kgs is not in dispute. Even in that light whether the subsequent tender notification dated 12.10.2016 for the same product to the extent of 1500 kgs will call for interference at the hands of this Court is the moot question. It is no doubt true that the subsequent tender notification is for the quantity of 1500 kgs, which will include the quantity for which the purchase order was yet to be issued as it was the total quantity for which the earlier tender notification was issued.
7. Though that be the position, from the document at Annexure R2, it is seen that as per the quality assurance report, the quantity of 200 kgs supplied on 20.06.2016, the specific gravity was found to be lower. Further the letters at Annexure- R3 to5 and 9 to 17 will disclose that the respondents had intimated the petitioner about committing default in their delivery schedule. Though the same is disputed by the learned senior counsel for the respondent, such disputed questions cannot be considered in a writ petition of the present nature. At this stage, all that is necessary to be noticed is that though the tender notification was issued calling for supply of 4800 kgs, the purchase order placed was for 3500 kgs. If the petitioner feels that without terminating the contract with them the fresh tender notification could not have been issued and by the said process the petitioner has been denied the purchase order for the remaining 1300 kgs, and the petitioner expects the relief either for the purchase order for supply of the remaining quantity in the nature of specific performance or to be compensated for the damage if any suffered, the petitioner will have to avail the remedies in accordance with law. When prima facie from the letters exchanged, it is seen that there are certain disputes even with regard to the extent of the supply made, this Court will not be justified in exercising its discretion to interfere in a contractual matter though the instant petition is assailing a tender notification.
8. Insofar as resolution of disputes between the parties, the respondents have referred to clause-13 in the purchase order to point out that the same is to be resolved through arbitration. The learned senior counsel for the petitioner would however contend that the said Dispute Resolution Mechanism is only in respect of the disputes arising under the purchase order and would not relate to the contention raised by the petitioner relating to the issue of tender notification. Though such contention is raised, it is noticed that the justification put forth by the respondents to issue the fresh tender notification for the required quantity of Verivert Oil is that even in respect of the purchase order dated 17.06.2016 issued for a portion of the quantity indicated in the earlier notification, the supplies made were not in order which has constrained the respondents to refrain from issuing further purchase order to the petitioner.
9. If that be the position, the very nature of supply made under the purchase order issued and the dispute arising thereunder would become germane for consideration so as to determine as to whether the subsequent tender notification is a consequential action. The said consideration would become necessary to find out as to whether the petitioner would be entitled to any relief. Such determination is to be made in the arbitration proceedings and a decision is to be taken therein. The petitioner therefore will have to avail the remedy open to them in law.
In that view, the petition is disposed of with liberty to the petitioner to avail their remedies in accordance with law. All contentions in that regard are left open. No costs.
Sd/- JUDGE akc/bms