IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF MARCH, 2019 BEFORE THE HON’BLE MR.JUSTICE ALOK ARADHE WRIT PETITION NO.31561/2014 (GM-TEN) BETWEEN M/S. TRACKS AND TOWERS INFRATECH PVT LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT FLAT NO.206, ROAD NO.76, JUBILEE HILLS, HYDERABAD-560033.
REPRESENTED BY ITS PA HOLDER, MR. B.SREEHARI S/O. DHARMARAO AGED ABOUT 35 YEARS. ... PETITIONER (BY SRI JAYAKUMAR.S.PATIL, SENIOR COUNSEL A/W SRI K H SOMASEKHAR, ADV.) AND 1. KARNATAKA POWER CORPORATION LIMITED, NO.22/23, 1ST FLOOR, SUDARSHAN COMPLEX, SESHADRI ROAD, BANGALORE-560009. REPRESENTED BY ITS MANAGING DIRECTOR.
2. RAICHUR POWER CORPORATION LIMITED, RAICHUR-MEHBOOB NAGAR ROAD, DEVASUGUR-584170, KARNATAKA, REPRESENTED BY ITS MANAGING DIRECTOR.
3. THE CHIEF ENGINEER (CIVIL DESIGNS) KARNATAKA POWER CORPORATION LTD., NO.22/23, 1ST FLOOR, SUDARSHAN COMPLEX, SESHADRI ROAD, BANGALORE-560009. ... RESPONDENTS (BY SRI AJAY J N, ADV. FOR C/R1 AND R2 & R3.) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS WHICH ULTIMATELY RESULTED IN PASSING IMPUGNED COMMUNICATION AT ANN-A DATED 18.6.2014 ISSUED BY THE R-2 AND QUASH THE IMPUGNED COMMUNICATION / ORDER AT ANN-A DATED 18.6.2014 ISSUED BY R-2 FOR FORFEITING EMD AMOUNT AND ENCASHING BANK GUARANTEES ETC.
THIS WRIT PETITION COMING ON FOR “PRELIMINARY HEARING IN ‘B’ GROUP”, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Sri Jayakumar S.Patil, Sr.Counsel with Sri K.H.Somasekhar, Adv. for the petitioner.
Sri Ajay J.N., Adv. for C/R1 & R2 and R3.
This petition is admitted for hearing. With the consent of learned Counsel for the petitioner, the same is heard finally.
2. In this petition under Article 226 and 227 of the Constitution of India, the petitioner has assailed the order dated 18.06.2014 issued by Respondent no.2 forfeiting Earnest Money Deposit (`EMD’ for short) amount and encashing the Bank gurantees and also seeking to return the EMD and original Bank Guarantee given by Corporation Bank in favour of respondent no.2 and also seeking direction to permit the petitioner to participate in the new tenders vide Annexures L and M scheduled to be held on 14.7.2014 and 17.7.2014.
3. The facts giving raise to filing of the instant petition are, petitioner which is a Company registered under the Companies Act, 1956 is involved in construction of various infrastructure projects throughout the country including the State of Karnataka. Respondent No.2 invited the bids on 6.11.2013 through the Centre for E-Governance for construction of earth work in the form of bridges, earth work information, construction of bridges and permanent way works for Railway siding and Marshalling Yard works at Yermarus Thermal Power Station (YTPS-2x800 MW) near Yermarus village, Raichur District, Karnataka.
4. The petitioner, along with other bidders submitted their bid for the above work. One of the bids submitted by one M/s.KVR Railinfra Projects Pvt.Ltd., Secunderabad was rejected at the time of opening the techno commercial bid by the 2nd respondent. Being aggrieved by the rejection of the bid of the said Company, they filed WP No.11035/2014 before this Court challenging the conditions imposed in the bid documents and sought for quashing of the entire tender proceedings. In the said writ petition, interim order was passed on 05.3.2014. Respondent-2 filed an application for vacation of the ad interim order dated 21.4.2014. In the affidavit annexed in support of the aforesaid application, respondent no.2 made an averment that tender notification dated 5.03.2014 if cancelled will in no manner affect the rights of any bidder. Accordingly, by an interim order dated 05.03.2014, the interim order of stay granted by this Court was vacated and tender notification was cancelled on 11.6.2014.
5. Thereafter, on 18.6.2014, the impugned order was passed forfeiting the bank guarantee as well as EMD furnished by the petitioner on the ground that the petitioner has submitted fabricated documents regarding the financial turnover and cancelled the bid and subsequently the writ petition was disposed of by this Court by order dated 20.6.2014 on the ground that nothing survives for adjudication as the tender notification itself has been withdrawn.
6. In the aforesaid factual background, the petitioner has approached this Court.
7. Learned Sr.Counsel appearing for the petitioner while inviting the attention of this Court to the affidavit filed on behalf of respondent no.2 in the writ petition preferred by M/s.KVR Raininfra Projects Pvt. Ltd., submitted that respondent no.2 had taken a decision to cancel the tender notification dated 6.11.2013 and has sought for vacation of the stay on the ground that the same will in no manner come in the way of cancellation of tender notification dated 6.11.2013. It was also stated in the affidavit by respondent no.2 that if tender notification dated 6.11.2013 is cancelled, it will in no manner affect the rights of any bidder.
8. This Court, in para.2 of the order dated 20.6.2014 held that the tender stood effaced from the record. It is also stated, after cancellation of tender notification, the contractual obligations of the parties did not exist and therefore, the impugned order could not have been passed by respondent no.2.
9. On the other hand, learned counsel for the respondents submitted that the bank guarantee is a sort of contract and therefore, second respondent could have very well taken an action for forfeiture of the bank guarantee as the petitioner’s bid was contrary to the terms and conditions of the tender notification. It is further submitted that action was taken against the petitioner in terms of Rule 24 of the Karnataka Transparency in Public Procurements Rules, 2000.
10. I have considered the submission made by the learned counsel for the parties and I have perused the record. Admittedly, on the date of forfeiture of bank guarantee as well as EMD, the tender notification dated 6.11.2013 was not in existence as the same was cancelled on 11.6.2014. The relevant extract of the affidavit filed by respondent no.2 reads as under:
“3. I submit that the bids of Petitioner and the 4th Respondent were not qualified with the terms of the tender specifications. Hence the contention of the Petitioner that the 1st Respondent is entering into talks/negotiations with the 4th Respondent is false.
4. I submit that in light of above fact, the 2nd Respondent has considered it appropriate to cancel the tender notification NO.C/RPCL/ YTPS/RSMY/1622 dated 6.11.2013.
5. The interim order dated 05./03/2014 passed by this Hon’ble Court may come in the way of cancellation of tender notification dated 06.11.2013. I further submit that the tender notification dated 06/11/2013 if cancelled will in no manner affect the rights of any bidder.”
11. The relevant extract of order dated 20.6.2014 contained in para.2 reads as under:
“2. Even according to learned Counsel for the respondent – Karnataka Power Corporation Limited, tender in question was withdrawn and if that is o, nothing remains for consideration. In other words, tender stood effaced from the records.”
12. Thus, on a perusal of the affidavit filed on behalf of respondent No.2 as well as the order dated 20.6.2014 passed by this Court, it is evident that respondent no.2 has withdrawn the tender notification unconditionally without reserving any liberty to it to take action against the bidders. On the other hand, the statement could not have been made by respondent No.2 in the affidavit that the withdrawal of tender notification will in no manner affect the rights of any bidder.
13. Since there was no subsisting contract as on the date when the impugned order was passed i.e. on 18.6.2014, respondent No.2, having withdrawn the tender notification unconditionally, could not have taken action against the petitioner. The impugned order is therefore quashed. Respondent No.2 is directed to release the bank guarantee as well as EMD in favour of the petitioner within a period of two months from the date of receipt of a copy of this order.
Accordingly, the petition is disposed of.
Sd/- JUDGE Sk/- CT-HR