IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF APRIL, 2017 BEFORE THE HON’BLE MR. JUSTICE A S BOPANNA W.P.No.30577/2016 (GM-TEN) C/W W.P.No.12962/2016 (GM-TEN) BETWEEN:
P.J.B. ENGINEERING PVT. LTD., O/A. No.413, RATHNA BUILDING 4TH FLOOR, RICHMOND ROAD BENGALURU-560 025 REP. BY ITS MANAGING DIRECTOR MR. P.J. BABY S/O MR. P.D. JOSEPH AGED ABOUT 64 YEARS ... PETITIONER (COMMON) (BY SRI K SHASHI KIRAN SHETTY, SR.COUNSEL A/W MS. FARAH FATIMA, ADV.) AND:
1. KARNATAKA POWER CORPORATION LTD., O/A. 82, SHAKTHI BHAVAN RACE COURSE ROAD, BENGALURU-56 0001 REP. BY ITS MANAGING DIRECTOR 2. CHIEF ENGINEER (CIVIL) /BTPS KARNATAKA POWER CORPORATION LTD., BALLARI THERMAL POWER STATION KUDATINI-573152 BELLARY DISTRICT.
(BY SRI AJAY J.N., ADV. FOR ... RESPONDENTS (COMMON) M/S. PRAGATI LAW CHAMBERS FOR R1 & 2) W.P.No.30577/2016 IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH THE ORDER DATED 29.04.2016 GRANTING APPROVAL TO TENDER WITH RESPECT TO WORK INFRASTRUCTURE DEVELOPMENT WORKS CONSISTING OF ROAD WORKS INTERNAL DRAINS STORM WATER DRAINS AND BOX CULVERTS AT BTPS TOWNSHIP UNDER PACKAGE IV IN THREE STAGES AS HIGHLY ARBITRARY, ILLEGAL AND VIOLATIVE OF ARTICLE 14 AND 19 (1) (G) OF THE CONSTITUTION OF INDIA (ANNEX-A) AND ETC.
W.P.No.12962/2016 IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO QUASH THE DECISION DATED 03.03.2016 OF THE R1 CANCELLING THE NOTIFICATION DATED 13.10.2015 AND RE-INVITING THE TENDER AS HIGHLY ARBITRARY, ILLEGAL AND VIOLATIVE OF ARTICLE 14 AND 19 (1) (G) OF THE CONSTITUTION OF INDIA (ANNEX-A) AND ETC.
THESE WRIT PETITIONS HAVING BEEN RESERVED FOR ORDERS ON 18.04.2017, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING :
O R D E R The parties in both these petitions are the same and the subject matter for consideration is inter- related, which will require a composite consideration. Hence the petitions are heard together and disposed of by this common order.
2. The respondent herein had floated the tender notification dated 13.10.2015 for the work of Infrastructure Development Works consisting of Road works, Internal drains, Storm water drains and box culverts at BTPS Township. The petitioner among others had participated in the tender process, had qualified in the technical evaluation and was placed at L2 in the financial evaluation. The respondent however chose to cancel the said tender notification dated 13.10.2015. The petitioner on contending that the L1 tenderer was not technically qualified and in such event, the petitioner who was the L2 tenderer should have been awarded the work order instead of cancelling the same is before this Court in W.P.No.12962/2016 making out a grievance with regard to the same and seeking issue of mandamus to award the tender work to the petitioner.
3. During the pendency of the said W.P.No.12962/2016, the respondent on bifurcating the earlier tender work, have issued the short term tender notification dated 18.05.2016 which is only for the work of Formation of roads and internal drains network to B & C quarters, Guest Houses, Shopping Complex, Security Buildings & Sports Complex etc., under Reach-I at BTPS Township. The petitioner in furtherance of the grievance made earlier, for the same reasons is before this Court in W.P. No.30577/2016 in assailing the subsequent short term tender notification dated 18.05.2016.
4. In the above background, I have heard Sri K. Shashikiran Shetty, learned senior counsel with Ms. Farah Fathima, learned counsel for the petitioner, Sri. Ajay J.N., learned counsel for the respondent and perused the petition papers.
5. In relation to the issue of the tender notification at the first instance, the cancellation of the same and the issue of the short tender notification for a portion of the work, the respondents in justification of the same have relied on the documents at Annexures- R-1, R-2 and the sketch of the layout along with the objection statement. In that regard it is contended that the Contracts Management Group of the respondent had recommended that the tender be cancelled. Accordingly, the Tender Accepting Authority after taking into consideration all aspects accorded the approval for cancelling the tender and to re-invite the tender on short term basis by duly updating the estimate and reviewing the scope of work with respect to the site conditions depending on the immediate requirement. Accordingly the work has been bifurcated as Reach-I, II and III. The work which is of immediate requirement is notified after updating the cost of the work to that extent.
6. The contention on behalf of the petitioner is that the justification which is sought to be put forth by the respondents is with the malafide intention. It is their case that another tenderer who had participated in the earlier process, Sri. Ningayya Basayya Hiremath, though was declared L1 was only marginally lower than the petitioner by Rs.4,47,509/- and the said tenderer not having technically qualified, the petitioner who was L2 ought have been considered and awarded the work. A recommendation in that regard was also made by the Deputy General Manager on 04.01.2016, yet the decision taken to re-tender the work is with malafide intention of helping the said Sri Ningayya Basayya Hiremath to take corrective steps and qualify in the technical evaluation when it is redone. Insofar as the initial reason stated with regard to the change of scope of work relating to the additional gate and wall, the petitioner contends that it could have been treated as separate work or if required the petitioner was prepared to undertake the said work also for the same cost which had been quoted. Hence the judicial review of the action of the respondents relating to the decision making process is sought to be questioned on the touchstone of Article 14 of the Constitution.
7. To contend in that regard the learned senior counsel for the petitioner has relied on the decision in the case of TATA Cellular -vs- Union of India [(1994) 6 SCC 651] wherein it is held that though the Court cannot interfere with the Government's freedom to contract, invitation to tender and refusal of any tender, but whether the decision or action is vitiated by arbitrariness, unfairness, illegality or a decision which no reasonable person will take, it can be looked into by the Court. Further, the decision in the case of Union of India and others -vs- Dinesh Engineering Corporation and another [(2001) 8 SCC 491] wherein it is held that though the clause in the tender may provide that the authority has the power to accept or not to accept the offer, such power should be exercised within the scope of the object and not arbitrarily.
8. The learned counsel for the respondent on the other hand has relied on the decision in the case of Ramana Dayaram Shetty -vs- International Airport Authority of India and others [(1979) 3 SCC 489] relating to the observation therein regarding the power available to reject all tenders and negotiate directly. The decision in the case of State of Jharkhand & others - vs- M/s.CWE - SOMA Consortium (2016 SCC Online 690) wherein it is held that while exercising judicial review in the matter of Government contracts, the primary concern of the Court is to see whether there is any infirmity in the decision making process or whether it is vitiated by malfide, unreasonableness or arbitrariness. The Court does not have the expertise to correct the administrative decision and the Government should have the freedom of contract and the right to refuse the lowest or any other tender is always available to the Government. The decision in the case of Rishi Kiran Logistics Private Limited -vs- Board of Trustees of Kandla Port Trust and others [(2015) 13 SCC 233] is relied to contend that the allegation of malafide and arbitrariness is to be established so as to be accepted and in the instant case, it has not been established that it has been made to favour Sri Ningayya Basayya Hiremath. It is contended that in fact his tender has been rejected and the details furnished will also indicate that the petitioner has never been discriminated upon and they have been awarded several contracts by the respondents and as such it cannot be assumed that it is to keep the petitioner out and favour any other person, the present action is taken.
9. The learned counsel for the respondent has also relied on the decision of this Court in the case of KLG Systel Limited -vs- State of Karnataka and others (2010 (5) Kant LJ 407) wherein the power available under Section 14 of the Karnataka Transparency in Public Procurements Act, 1999 (KTPP Act for short) was considered and it is held that the Tender Accepting Authority has the authority to reject all the tenders on the grounds including the change in the scope of procurement. It is held therein that in order to satisfy the rejection of the tender, the justification of the floating of the second tender is to be seen.
10. On the position of law as noticed from all the decisions, it cannot be in doubt that the judicial review is limited to the extent of examining about the decision making process and in that process, only if it is found that the decision taken is so arbitrary that no person could accept the same to be reasonable, in that circumstance, interference will be justified. In the said process, certain amount of discretion available to the procurement authority in contractual and tender matters will also have to be borne in mind keeping in view the larger public interest and the Court is not expected to impose its will under all circumstances and force the parties to enter into contracts which the party does not desire to. In that light, the decision taken by the respondent herein to cancel the earlier tender notification and to re-tender only a portion of the work by terming it as the change in scope of work is necessary to be taken note so as to consider whether it is arbitrary or unreasonable. Insofar as the power available to do so as provided under Section 14 of the KTPP Act, there can be no quarrel. It is no doubt true that the tender process dated 13.10.2015 was not initially proceeded further and concluded after the process of financial evaluation as it was felt that there was additional work that will have to be secured which cannot be separately got done. Keeping in view the fact that the subsequent short term tender notification dated 18.05.2016 was not issued only in that manner but has been floated with the alteration of the scope of work by bifurcating the work into different components, the issue will have to be examined in that context.
11. The tender notification dated 13.10.2015 if perused will indicate that the work notified thereunder is the entire work of infrastructure to include the roads, drains and culverts at the approximate tender amount of Rs.2090 lakhs for the BTPS Township and the work was targeted to be completed within 12 months including monsoon. In the nature of objections raised during the tender process itself and the consideration etc., has taken sufficient time without the process reaching its finality and the subsequent short term tender is notified on 18.05.2016, by which time seven months have elapsed. Keeping that in the background, the present decision if taken note, it is to have the work completed in stages. It is no doubt true, as contended the total cost estimated for the entire project for all the three stages as per the estimate for the work in three stages will be Rs.2328 lakhs but time lapse and the escalation in cost cannot be ignored. The work which is notified as Reach-I is only the roads and internal drains network of the different facilities in the BTPS Township and the cost estimated for that work is Rs.979.60 lakhs and the work is to be completed in 9 months. The decision was also taken keeping in view that the work concerned in the different stages could be taken up depending upon the requirements so that funds available can be utilised. The decision to take up the Reach-I was due to the fact that B & C quarters were nearing completion and the road work could be taken on priority. Taking such decision is the prerogative of the procurement authority to manage its resources and also implement the project. This Court will not be justified in forcing the procurement authority to award work in a manner which it does not desire to undertake. In any event the earlier tender process had not concluded and no right had been created in favour of the petitioner and the procurement authority was well within its right to decide against awarding the work.
12. Further, in the short term tender process which is notified, the petitioner in any event will be entitled to participate. Even if the said Sri Ningayya Basayya Hiremath regarding whom the petitioner has made allegations participates in the process, he would have to qualify again in the technical as well as financial tender evaluation and only then he would succeed in securing the work. Hence, it is too premature at this stage to conclude that the cancellation of the earlier tender and floating of the present tender is only with the malafide intention to facilitate him to participate as the success in any circumstance cannot be assured to him if there are more competitive bids, in the present process including that of the petitioner. In that circumstance when there is change in scope of work in the re-tender notification, the cancellation of the earlier notification prior to the same being finalised will be in terms of Section 14 of KTPP Act. That apart as noticed, the decision taken is to take up the work in three stages depending on the urgency and financial resource. The impugned notification was issued on 18.05.2016 and nearly a year has elapsed due to this litigation. The fact that the Reach-II work could not be taken up without completion of the Reach-I work and that it was not split up only with malafide intention as alleged is also clear from the fact that the tender notification in that regard for the Reach-II and III work has not been issued thusfar. The interference in such matters will also not serve public interest.
For all the aforestated reasons, the petitions being devoid of merit stand dismissed with no order as to costs.
Sd/- JUDGE akc/bms