IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF AUGUST 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.28100 OF 2019 (GM-TEN) BETWEEN:
M/S. UNIVERSAL BUILDERS A REGISTERED PARTNERSHIP FIRM NO.418/9, 1ST FLOOR, GREEN LEAF LAYOUT 4TH BLOCK, 80 FEET ROAD KORAMANGALA BENGALURU-560034 REPRESENTED BY ITS MANAGING PARTNER MR DINESH RAMACHANDRA.
(BY MR. ARVIND SHARMA, A/W MR. ARJUN RAO, ADVS.) AND:
… PETITIONER 1. BANGALORE DEVELOPMENT AUTHORITY TENDER SCRUTINY COMMITTEE BANGALORE DEVELOPMENT AUTHORITY A STATUTORY BODY UNDER THE BANGALORE DEVELOPMENT AUTHORITY ACT 1976 T CHOWDIAH ROAD, KUMARAPARK (WEST) BENGALURU-560020 REP. BY ITS SECRETARY.
2. MFAR DEVELOPERS PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT NO.3, LAVELLE ROAD BENGALURU, KARNATAKA 560001 REPRESENTED BY ITS MANAGING DIRECTOR.
3. ADDITIONAL CHIEF SECRETARY URBAN DEVELOPMENT DEPARTMENT GOVERNMENT OF KARNATAKA VIKASA SOUDHA BENGALURU-560001.
(BY MR. G.S. KANNUR, SR. ADVOCATE FOR MR. JEEVAN KUMAR B.S. ADV., FOR C/R2 MR. MURUGESH V. CHARATHI, ADV., FOR R1 MR. VIJAY KUMAR A. PATIL, AGA FOR R3) … RESPONDENTS THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO SET ASIDE THE ORDER DATED 03.05.2019 COMMUNICATED ON 25.05.2019 PASSED BY THE R-3 APPELLATE AUTHORITY AND ADDITIONAL CHIEF SECRETARY TO THE GOVERNMENT, URBAN DEVELOPMENT DEPARTMENT, GOVERNMENT OF KARNATAKA, R-3 IN APPEAL NO.UDD 618 MNX 2018 (ANNX-AC) & ETC.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Mr.Arvind Sharma, Learned counsel for Mr.Arjun Rao, Learned counsel for the petitioner.
Mr.G.S.Kannur, learned Senior counsel for Mr.Jeevan Kumar B,.S., learned counsel for caveator respondent No.2.
Mr.Murugesh V. Charathi, learned counsel for respondent No.1.
Mr.Vijay Kumar A. Patil, learned Additional Government Advocate for respondent No.3.
The writ petition is admitted for hearing. With consent of the learned counsel for the parties, the same is heard finally.
2. The petitioner, registered partnership firm has invoked the jurisdiction of this Court under Article 226 of the Constitution of India seeking a writ of certiorari for quashment of order dated 3.5.2019 passed by the Appellate Authority under the Karnataka Transparency in Public Procurements Act, 1999 (hereinafter referred to as 'the Act' for short). The petitioner also seeks quashment of proceeding dated 09.03.2018 of the Tender Scrutiny Committee as well as order dated 09.10.2017, by which contract in question was awarded to respondent No.2. The petitioner also seeks a writ of mandamus directing respondent No.1 to open the financial bid of the petitioner and URC construction company Ltd., forming part of bid dated 25.11.2017 and to consider the same.
3. Facts leading to filing of the writ petition in nut shell are that on 19.10.2017, the respondent No.1 issued a Notice Inviting Tender, project information memorandum and request for proposal for redevelopment and construction of existing BDA shopping complexes by demolishing and rehabilitation of existing tenants and development of land into a shopping mall cum commercial complex in six areas viz., HSR Layout, R.T.Nagar, Austin Town, Koramangala, Vijaynagar and Sadashivanagar in Bengaluru City (hereinafter referred to as ‘the project’ for short). The estimated cost of the project was Rs.330 Crores. As per Clause 2.1.2 of the Request for Proposal document, only those bidders who fulfill technical conditions/requirements were entitled to have their financial bids opened for consideration.
4. The technical capacity of the bidder was prescribed to be that the bidder shall have over past ten financial years preceding the bid due date have:
(i) Developed or constructed a municipal market / commercial complex having a built-up area of 50,000 square meters accommodating at least 100 numbers of shops / stalls under concession from any government organization.
OR (ii) Developed or constructed a residential cum shopping commercial complex having a built-up area of at least 1,00,000 square meters at least in JV/PPP in public sector only.
5. The respondent No.1 thereafter was required to open the financial bid to ascertain whether the bidder met the financial qualification requirements, being that the bidder shall over the past five financial years preceding the bid due date have:
(i) Achieved in at least two financial years an average annual turnover of Rs.330 Crore and (ii) Net-worth in the form of liquid assets and / or availability of credit facilities of no less than Rs.200 Crore.
(iii) The consortiums shall have one member with operation and maintenance capability of managing 20,000 sq.m. of commercial and or residential building in any previous five years.
6. On acceptance of the technical and financial bid, the respondent No.1 would evaluate the plan including the features sharing the built up area ratio with respondent No.1 and thereafter, the project was to be awarded in terms of Request for Proposal Document.
7. The petitioner and one URC Construction Pvt.
Ltd., a Company incorporated under the Companies Act, 1956 under a consortium prepared a detailed bid and submitted the same on 27.11.2017. The respondent No.2 as well as other bidders also submitted their bid. However, it is pleaded that in the month of March 2018, the technical bid of the petitioner and URC Construction Pvt. Ltd., was rejected without assigning any reasons. Thereafter, a news item was published on 23.03.2018, in which it was stated that project has been awarded to respondent No.2. The petitioner challenge the aforesaid action by way of W.P.No.17653/2018 before this Court. A Bench of this court by an interim order dated 28.05.2018 directed that any action taken in pursuance of impugned Tender Notification shall be subject to result of the writ petition. The aforesaid writ petition was disposed of by an order dated 13.11.2018 directing the petitioner to file an appeal before the Appellate Authority under the Act. The Appellate Authority under the Act by an order dated 03.05.2019 has dismissed the appeal preferred by the petitioner. In the aforesaid factual background, the petitioner has approached this court seeking the reliefs as stated supra.
8. Learned counsel for the petitioner submitted that technical bid of the petitioner was rejected on the ground that the petitioner has failed to develop or construct a municipal market/commercial complex having a built up area of 50,000 Sq. mts. accommodating atleast 100 shops, stalls under concession from any government organization and the financial bid of the petitioner was rejected on the ground that the petitioner does not have the net worth in the form of liquid assets to the tune of Rs.200 Crores. It is further submitted that the respondent No.1 ought to have appreciated that the petitioner had carried out a project, which is under concession from the government and therefore, the respondent No.1 grossly erred in holding that the petitioner did not carry out any project for the government. It is also submitted that annual turnover of one of the members of consortium was Rs.616 Crores and other member of the consortium had the credit limit of Rs.200 Crores. However, the aforesaid aspect of the matter was not appreciated either by the Tender Scrutiny Committee or by the Appellate Authority.
9. On the other hand, learned counsel for respondent No.1 submitted that the petitioner did not furnish any certificate to show that he had performed the work for any government organization. It is further submitted that grant in aid was given to one Erode Textile Mills Ltd., which is neither a Government of India Project nor a Government of Karnataka Project. It is also submitted that Clause 2.1.3 of the tender document requires certificate from statutory Auditors and the document to which reference has been made, which is annexed at Page 771 was not uploaded with the tender documents. Learned counsel for the respondent No.1 has also invited the attention of this court to the finding of the Tender Scrutiny Committee as well as the Appellate Authority.
10. Learned Senior counsel for respondent No.2 submitted that the petitioner did not comply with the terms and conditions of the Notice Inviting Tender and neither any arbitrariness nor any malafides have been alleged against the respondent No.1. It is further submitted that on 07.05.2018, the Work Order has been issued and the respondent No.2 has commenced the work. It is also submitted that the dispute in this petition is between the rival tenderers and there is no element of public interest involved in this petition. In support of aforesaid submissions, reliance has been placed on ‘MAA BINDA EXPRESS CARRIER AND ANOTHER VS. NORTH – EAST FRONTIER RAILWAY AND OTHERS’ (2014) 3 SCC 760, ‘MUNICIPAL CORPORATION, UJJAIN AND ANOTHER VS. BVG INDIA LIMITED AND OTHERS, (2018) 5 SCC 462 as well as decision of this court in ‘IMR.LOHITH M & OTHERS VS. STATE OF KARNATAKA AND OTHERS’, W.P.NO.53676/2018.
11. By way of rejoinder, learned counsel for the petitioner submitted that the averments with regard to malafides have been made in the writ petition and with reference to a decision of the Supreme Court in ‘INDIAN ALUMINIUM CO. LTD., VS. THANE MUNICIPAL CORPORATION’, 1992 Supp. (1) SCC 480 and has pointed out that the expression ‘concession’ includes rebate as well.
12. I have considered the rival submissions and have perused the record. Before proceeding further, I may advert to the well settled legal principles delineated by catena of decisions of the supreme court. ‘IN RAUNAQ INTERNATIONAL LTD., VS. IVR CONSTRUCTION LTD.’, (1999) 1 SCC 492: (AIR 1999 SC 393), it has been held that Court should not interfere in exercise of power of judicial review in dispute between the two rival tenderers in the absence of public interest. Similarly view was taken in ‘SANJAY KUMAR SHUKLA VS. BHARAT PETROLEUM CORPN. LTD.’, (2014) 3 SCC 493: (AIR 2014 SC 3778) and it has been held that the Court should be vigilant against agitation of private disputes under the writ jurisdiction when there is no improper exercise of power on the part of public authority. It has further been held that power of judicial review has to be exercised only when justified by public interest having due regard to the fact situation of the case. In ‘BAKSHI SECURITY AND PERSONNNEL SERVICES (P) LTD. VS. DEV KISHAN COMPUTED (P) LTD.’, (2016) 8 SCC 446:
(AIR 2016 SC 3585), the Supreme Court summarized the principles with regard to interference in contractual matters and it was held that power of judicial review cannot be invoked to protect the private interest over the public interest or to decide contractual disputes. It has been further held that before exercising the power of judicial review, the Court must pose to itself the questions, namely, whether process adopted or decision made is mala fide or intended to favour someone, whether process adopted or decision made is so arbitrary and irrational that no responsible authority acting reasonably in accordance with law could have reached such a decision and whether public interest is affected.
13. In the backdrop of aforesaid well settled legal position, the facts in the case on hand may be seen. Admittedly the tender notification contains the stipulation that the bidder must produce the certificate having established commercial complex in any government organization. The aforesaid condition pertains to eligibility of the tenderer and therefore, has toi be treated as mandatory condition. The petitioner has not annexed any documents to show that he has not executed the work for any government organization. From the documents annexed by the petitioner it is evident that Erode Textile Ltd was provided grant in aid by the State Government. The aforesaid organization is neither a government of Karnataka project nor is Government of India project. Since, the petitioner has failed to fulfill the essential condition with regard to eligibility which is essential in nature therefore, the technical bid of the petitioner has rightly been rejected. Besides this, the dispute is between the rival tenderers in which no element of public interest is involved. For yet another reason no interference is called for as concession agreement has already been executed on 22.03.2018 and respondent No.2 has formed in all six separate special purpose vehicles for each of six BDA complexes as per provisions of the tender documents and consortium has already commenced the project activities such as drawings and designs evacuation of shops in the BDA complexes, mobilization of funds. Therefore, any interference at this stage would result in delay in implementation of the project works and would cause delay in providing required facilities to the public in general and loss of revenue to the respondent No.1. It would also increase the cost of implementation of project work. The decision of the tendering authority as well as the decision passed by the Appellate Authority under Section 16 of the Act neither suffers from any jurisdictional infirmity nor any error apparent on the face of the record warranting interference of this court under Article 226 of the Constitution of India.
In the result I do not find any merit in this petition. The same fails and is hereby dismissed.
Sd/- JUDGE SS