IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JULY 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.30657 OF 2019 (GM-TEN) BETWEEN:
SRI. LAKSHMI VENKATESHWARA TRADERS BAMBOO BAZAR ROAD, BASAPUR, WARD NO. 14, J. P. NAGAR, DAVANAGERE - 577002 REPRESENTED BY PROPRIETOR, ARUNKUMAR C. G., S/O. GURUSIDDAPPA. G, AGED ABOUT 39 YEARS.
(BY SRI. CHANDRASHEKAR G. M., ADV.) AND 1. THE STATE OF KARNATAKA ... PETITIONER DEPARTMENT OF FOOD & CIVIL SUPPLIES, M.S. BUILDING, DR. AMBEDKAR VEEDHI, BANGALORE-560 001, REP. BY ITS PRINCIPAL SECRETARY.
2. THE EXECUTIVE DIRECTOR KARNATAKA RESIDENTIAL EDUCATIONAL INSTITUTIONS SOCIETY, NO.8, 6TH FLOOR, CUNNINGHAM ROAD, BANGALORE-560 052.
... RESPONDENTS (BY SRI. VIJAY KUMAR A. PATIL, AGA) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE TENDER NOTIFICATION AND TENDER DOCUMENT DTD:21.5.2019 PRODUCED AT ANNEXURE-B AND C RESPECTIVELY ISSUED BY THE R-2; DIRECT THE R-2 TO CALL FOR FRESH TENDER NOTIFICATION AND ITS DOCUMENTS SO AS TO CURE THE PRESENT DEFECTIVE CONDITIONS IN THE TENDER NOTIFICATION AND TENDER DOCUMENTS AT ANNEXURE-A AND B RESPECTIVELY.
THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R In view of the submission made by learned counsel for petitioner, office objection is ignored.
Sri. Chandrashekar G. M., learned counsel for the petitioner.
Sri. Vijay Kumar A. Patil, learned counsel for the respondent.
2. Petition is admitted for hearing. With consent of the parties, same is heard finally.
3. In this petition, the petitioner inter alia has prayed for a writ in the nature of certiorari to quash the tender notification dated 21.05.2019 issued by respondent No.2 and for a writ of mandamus directing the respondent No.2 to call for fresh tender notification after curing the defects in the tender notification dated 21.05.2019.
4. Facts giving rise to filing of this petition briefly stated are that on 21.05.2019 the respondent No.2 floated a tender for supply of perishable and non- perishable food materials to residential schools/colleges in Chikkamagalur District. On 29.06.2019 a pre-bid meeting was held. As per the schedule, the last date for submission of bid was 25.07.2019 and on 27.07.2019 the technical bid shall be opened.
5. The petitioner is a registered firm and deals with supply of perishable and non-perishable food materials. It is the case of the petitioner that even though the last date for submission of income-tax returns is on 30.09.2019, however the bidders are being asked to submit the income-tax returns in respect of the current financial year also which is per se arbitrary. It is also averred that bidder is being asked to furnish the bank guarantee, which is arbitrary. It is also averred that the condition with regard to performance capability is also arbitrary, which requires that the bidder should have supplied all similar materials such as perishable and non-perishable food materials to the extent of average value amounting to 80% of the value of the bid amount put to tender during preceding three years ie., 2016-17 to 2018-19.
6. Learned counsel for petitioner submitted that the impugned tender conditions are per se arbitrary and the petitioner is being deprived of his right to participate in the tender as the petitioner has not yet filed the income-tax returns and is at liberty to file the returns upto 30.09.2019. Therefore, the impugned tender conditions be quashed.
7. On the other hand, learned counsel for respondent No.1 has submitted that the scope of judicial review with regard to the tender conditions is extremely limited and the tender conditions are neither arbitrary nor can be said to be perverse.
8. The Hon’ble Supreme Court in MICHIGAN RUBBER (INDIA) LIMITED, supra, after taking note of decisions of the Hon’ble Supreme Court in TATA CELLULAR VS. UNION OF INDIA (1994) 6 SCC 651, RAUNAQ INTERNATIONAL LTD. VS. IVR CONSTRUCTION LTD. (1999) 1 SCC 492 and ASSOCIATION OF REGISTRATION PLATES VS. UNION OF INDIA (2005) 1 SCC 679, culled out the legal principles and held that basic requirement of Article 14 is fairness in action by the State and non- arbitrariness in essence and substance is the heart beat of fairplay and these actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. It was further held that in the matter of formulating conditions of a tender document and awarding a contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authorities is found to be malicious and a misuse of statutory powers, interference by the Courts is not warranted. It is also held that if the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, interference by Court is very restrictive since no person can claim a fundamental right to carry on the business. The Hon’ble Supreme Court formulated the following two questions which the Court should pose itself before invoking the power of judicial review, namely:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”? and (ii) Whether the public interest is affected?
It was accordingly held that if answers to the above questions are in the negative, then there should be no interference under Article 226.
9. It is equally a well settled legal principle that award of contract whether it is by a private party or by a public body or the State, is essentially a commercial transaction and in arriving at a commercial decision, considerations which are paramount for commercial considerations. The State can choose its own method to arrive at a decision. It can enter into negotiations before finally deciding to accept one of the offers made and it is free to grant any relaxation for bona fide reason if the tender conditions permit such relaxation. The State, its Corporations, instrumentalities and agencies have the public duty to be fair to all concerned. It is further held that even if some defect is found in the decision making process, the Court must exercise its discretionary power under Article 226 of the Constitution of India with great caution and must exercise only in furtherance of public interest and not merely on making out of a legal point. It is also held that Court should always keep the larger public interest in mind in order to decide whether or not its intervention is called for and only when it comes to the conclusion that overwhelming public interest requires interference, the Court should intervene. (SEE SANJAY KUMAR SHUKLA, SUPRA AND MAA BINDA EXPRESS CARRIER AND ANOTHER VS. NORTH-EAST FRONTIER RAILWAY AND OTHERS (2014) 3 SCC 760, BAKSHI SECURITY AND PERSONNEL SERVICES PRIVATE LTD. VS. DEVKISHAN COMPUTED PRIVATE LIMITED AND OTHERS (2016) 8 SCC 446, MONTECARLO LIMITED VS. NATIONAL THERMAL POWER CORPORATION LIMITED (2016) 15 SCC 272, CONSORTIUM OF TITAGARH FIREMA ADLER S.P.A- TITAGARH WAGONS LTD. VS. NAGPUR METRO RAIL CORPORATION LTD. AND ANOTHER (2017) 7 SCC 486, CRRC CORPORATION LIMITED VS. METRO LINK EXPRESS FOR GANDHINAGAR AND AHMEDABAD COMPANY LIMITED (2017) 8 SCC 282 and Municipal Corporation, Ujjain, SUPRA.
10. In view of the aforesaid well-settled legal position, this Court is of the view that formulation of the tender conditions is extremely limited and this Court could not sit in appeal with regard to the validity of the tender conditions formulated by the respondents. It is pertinent to mention here that even though as per the Income-Tax Department, the last date for filing the income-tax returns is 30.09.2019, any person who is interested in participating the bid can file the returns even before 30.09.2019 and can participate. Similarly the condition with regard to performance capability by no stretch of imagination can be said to be perverse, as its object is to ensure successful completion of the contract. The condition with regard to furnishing of the bank guarantee is also a condition to ascertain the financial soundness of the firm participating in the tender notification. The issue with regard to formulation of the tender condition is within the realm of the authority inviting tender notification. The impugned tender conditions by no stretch of imagination are said to be either arbitrary or perverse. For yet another reason, the petitioner is not entitled to any relief in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, as the impugned tender notification was issued on 21.05.2019 and the petitioner has filed this petition before this Court on 20.07.2019 ie., after a period of two months for which no explanation has been offered in the writ petition.
11. In view of the above, I do not find any merit in the writ petition and the same is hereby dismissed.
Sd/- JUDGE RD