Shankar v. VS Secretary, Urban Development Authority
2015-03-13
B.V.NAGARATHNA
body2015
DigiLaw.ai
Order B.V. Nagarathna, J. 1. Petitioners are Councilors of Srinivasapura Town Municipality, respondent 8 herein. They have assailed circular dated 10-11-2014 issued by 1st respondent and circular dated 27-10-2014 issued by 2nd respondent (Annexures-A and B to the writ petitions respectively) and have sought a direction to the 1st respondent to consider their representation dated 5-1-2015. By circulars at Annexures-A and B, it is ordered that the proposed construction of a commercial complex in the place where the Musafeer Khana is situated at Srinivasapura Town is exempted from the provisions of the Karnataka Transparency in Public Procurements Act, 1999 (hereinafter referred to as 'the Act', for the sake of brevity), more specifically Chapter II therein as notification under Section 4(g) of the said Act has been issued in that regard. According to petitioners, 8th respondent-Authority decided to establish a commercial complex, where presently Musafeer Khana is situated at Khata No. 76 of Srinivasapura Town Municipality. The construction cost of Rs. 5,00,00,000/- has been sanctioned by the 2nd respondent. Respondent 8 sought for release of funds to the 6th respondent by letter dated 19-7-2014, a copy of which is at Annexure-C. Third respondent permitted establishment of a commercial complex and also approved grant of Rs. 5,00,00,000/- for the said project. It was also indicated that the said construction must follow the provisions of the Act and Karnataka Transparency in Public Procurements Rules, 2000 made thereunder and it was directed that the procedure as contemplated under Section 18-A of the Act (E-procurement) must be followed. In that regard, notification dated 12-9-2014 was issued by the 3rd respondent, a copy of which is at Annexure-D. But the 8th respondent had passed a resolution on 18-8-2014. By that resolution, the members of the 8th respondent resolved that the said construction must be handled by the Kolar Nirmithi Kendra i.e., 7th respondent herein. A copy of that resolution dated 18-8-2014 is produced as Annexure-E to the writ petitions. On the basis of that resolution, respondent 5-Deputy Commissioner sent communication dated 1-9-2014 to the 1st respondent-authority regarding the transfer of the construction work to the 7th respondent-Authority (Annexure-F). On the basis of that communication, respondent 3 passed an order invoking clause (g) of Section 4 of the Act, a copy of which is at Annexure-G, dated 7-10-2014.
On the basis of that resolution, respondent 5-Deputy Commissioner sent communication dated 1-9-2014 to the 1st respondent-authority regarding the transfer of the construction work to the 7th respondent-Authority (Annexure-F). On the basis of that communication, respondent 3 passed an order invoking clause (g) of Section 4 of the Act, a copy of which is at Annexure-G, dated 7-10-2014. According to petitioners, this order dated 7-10-2014 is illegal as the said order has been passed at the instance of 10th respondent, who is the present member of the Legislative Assembly, Srinivasapura Constituency. Thereafter, notification at Annexure-B, dated 27-10-2014 has been issued, which is assailed in these writ petitions. 2. I have heard learned Counsel for petitioners and learned Additional Government Advocate for respondents 1 to 6 and learned Senior Counsel appearing for respondent 7 and learned Counsel for respondent 8. Respondent 9 is served and unrepresented and notice to respondent 10 was dispensed with. I have perused the material on record. 3. The main contention of petitioners' Counsel is that the respondent-State ought not to have deviated from the procedure envisaged under Chapter II-A of the Act, which deals with e-procurement, which was one of the conditions envisaged when the sanction to the project was accorded, by invoking clause (g) of Section 4 of the Act. It is his contention that the respondent-Authorities have given a go-bye to e-procurement in the instant case with an oblique motive and that there was no necessity to invoke clause (g) of Section 4 of the Act. He also contended that when throughout entire process the State Government insisted on construction of the commercial complex through e-procurement only, subsequently in the middle of the entire process, there has been a deviation by excluding the provisions of Chapter II from the Act, which is not correct. That even if clause (g) of Section 4 of the Act is invoked in the instant case it would not exclude application of Chapter II-A of the Act. He, therefore, contended that Annexures-A and B may be quashed and respondents may be directed to proceed under Chapter II-A of the Act, in the instant case. 4. These submissions have been countered by learned Senior Counsel for respondent 7 with reference to the statement of objections filed by respondent 7 as well as respondent 8. 5.
He, therefore, contended that Annexures-A and B may be quashed and respondents may be directed to proceed under Chapter II-A of the Act, in the instant case. 4. These submissions have been countered by learned Senior Counsel for respondent 7 with reference to the statement of objections filed by respondent 7 as well as respondent 8. 5. Learned Senior Counsel appearing for respondent 7 contended that it is within the wisdom of the State Government to invoke any of the clauses in Section 4 of the Act. That in the instant case, clause (g) of Section 4 of the Act has been invoked. When an order is passed by the State Government under clause (g) of Section 4 of the Act, the provisions of Chapter II would not apply. He further contended that Chapter II-A is only the other face of the coin of Chapter II, which is a mode of procurement and that if Chapter II dealing with Regulation of Procurement does not apply at all, then it must be construed that Chapter II-A, which deals with e-procurement would also not apply. The object and purpose of invoking various clauses in Section 4 of the Act was explained to contend that it is only under certain circumstances, the State Government could invoke Section 4 and that in the instant case, what has been done is the exclusion of the present project from Chapter II as well as Chapter II-A so that the construction could be carried out by none other than respondent 7, which is also an instrumentality of the State. That no private party is being benefited on account of invocation of clause (g) of Section 4 of the Act, is the submission. That one of the petitioners i.e., petitioner 2, who was a party to the resolution passed by respondent 8 to the effect that the project must be handed over to the 7th respondent, cannot now turn around and contend that the handing over of construction of the commercial complex to respondent 7 is illegal or with an oblique motive. He, therefore, contended that there is no merit in the writ petitions and that petitioners, who are Councilors of the 8th respondent-Municipality are only coming in the way of commencement and completion of the project. 6.
He, therefore, contended that there is no merit in the writ petitions and that petitioners, who are Councilors of the 8th respondent-Municipality are only coming in the way of commencement and completion of the project. 6. Learned Counsel appearing for respondent 8 as well as learned Additional Government Advocate appearing for respondents 1 to 6 adopted these submissions and further contended that when the State Government has invoked clause (g) of Section 4 of the Act, that is a matter left within the domain of the State Government and when a notification is issued under Section 4, not only Chapter II, but also Chapter II-A of the Act is excluded. The notification under Section 4 is issued for a specific procurement and it is not for all times to come, but from time to time after application of mind and that the petitioners cannot assail the notification issued in the instant case. 7. Having heard learned Counsel for the parties and on perusal of the material on record, it is noted that no doubt, initially, the project was to be executed under the provisions of Chapter II-A of the Act, which deals with e-procurement, but thereafter, 8th respondent-Municipality resolved that the 7th respondent must be handed over the project for its execution. The resolution passed by the 8th respondent was not conclusive but subject to the acceptance of the State Government. The State Government could have turned down that resolution and held that the project must be executed through e-procurement, but on the other hand, the State Government accepted that resolution and in fact, invoked clause (g) of Section 4 of the Act. If there is invocation of any of the clauses of Section 4 of the Act, it would be on the basis of circumstances, which are mentioned in each of those clauses. 8. Clause (g) of Section 4 reads as under: "4. Exceptions to applicability.--The provisions of Chapter II shall not apply to procurement of goods and services.-- x x x x (g) In respect of specific procurements as may be notified by the Government from time to time". On a reading of Section 4, it becomes clear that the object of that section is to exclude Chapter II from the procurement of certain goods and services having regard to the circumstances mentioned in those clauses.
On a reading of Section 4, it becomes clear that the object of that section is to exclude Chapter II from the procurement of certain goods and services having regard to the circumstances mentioned in those clauses. For example, clause (a) of Section 4states that if there is a natural calamity or an emergency declared by the Government, then the provisions of Chapter II would not apply. Similarly, there are other situations and circumstances, which are prescribed, where the State Government need not proceed under the provisions of Chapter II. Therefore, Section 4 is a general exception to Chapter II of the Act. 9. A perusal of Chapter II would indicate that the sections therein regulate the procurement of goods and services by a procurement entity. The object of that Chapter is to bring in transparency in the matter of procurement of goods and services. 10. Chapter II-A has been inserted by Act No. 13 of 2007 and is deemed to have come into force with effect from 27-11-2006. Chapter II-A dealing with E-procurement contains Section 18-A, which reads as under: "18-A. E-Procurement.--(1) There shall be a single unified e-procurement platform for all procurement entity which may be notified under sub-section (2). (2) With effect from such date, as may be specified by the Government, by notification, a procurement entity in respect of a class of procurement, if any, as may be notified shall procure its procurements through the e-procurement platform. (3) Notwithstanding anything contained in this Act, the Government may make rules, for specifying a separate procedure to be followed by procurement entities notified under sub-section (2) for e-procurement through e-procurement platform; and for non-application of other procedure of procurement to e-procurement". The object of insertion of Section 18-A of the Act is to bring in the method of e-procurement in the matter of procurement of goods and services by a procurement entity. E-procurement means through electronic mode, a single unified e-procurement platform has to be notified by the State Government under sub-section (2) of Section 18-A of the Act in respect of a class of procurement and in respect of that class of procurement, all the procurement entities must proceed through the e-procurement platform.
E-procurement means through electronic mode, a single unified e-procurement platform has to be notified by the State Government under sub-section (2) of Section 18-A of the Act in respect of a class of procurement and in respect of that class of procurement, all the procurement entities must proceed through the e-procurement platform. Sub-section (3) of Section 18-A states that notwithstanding anything contained in the Act, the Government may make rules, for specifying a separate procedure to be followed by procurement entities notified under sub-section (2) for e-procurement through e-procurement platform; and for non-application of other procedure of procurement to e-procurement. 11. In this case, we are not concerned as to whether the procedure as contemplated under Chapter II are to apply or procedure as contemplated under Chapter II-A has to be applied, the question herein is as to whether the invocation of Section 4 of the Act by the State Government would exclude not only Chapter II, but also Chapter II-A of the Act. In this regard, the contention of petitioners' Counsel is that only Chapter II is excluded and not Chapter II-A as already an order dated 12-9-2014 under Chapter II-A was made applicable to the project in question. 12. As already stated by insertion of Chapter II-A of the Act, there have been two modes of procurement of goods and services by the procurement entities under the Act: one is as envisaged under Chapter II, which can be conveniently called as manual tender whereas Chapter II-A deals with E-procurement or through electronic device. Chapter II and Chapter II-A are nothing but two faces of the same coin. They are only two different modes of procurement. When Section 4 states that Chapter II is excluded for a particular procurement of goods or services, it is construed as a general exception to Chapter II, then it must also be construed as exempting procedure under Chapter II-A also. Even if a notification has been issued under sub-section (2) of Section 18-A of the Act by the State Government, by which a procurement entity must resort to e-procurement with regard to procurement of goods and services, the State Government is empowered to invoke Section 4 provided the circumstances mentioned therein exist. As already stated, when there is a natural calamity or emergency declared by the State Government while excluding Chapter II, same must be construed to exclude Chapter II-A also.
As already stated, when there is a natural calamity or emergency declared by the State Government while excluding Chapter II, same must be construed to exclude Chapter II-A also. The object is to procure goods and services without resorting to the procedure envisaged under the Act when the State Government invokes Section 4. That is why it is called an exception clause, which must be given its full effect though must be strictly construed with regard to the circumstances mentioned therein must apply. 13. In the instant case, the State Government has invoked clause (g) of Section 4 which states that in respect of specific procurements as may be notified by the Government from time to time, Chapter II would not apply. Therefore, it must be for a specific procurement and it must be notified by the State Government. It cannot apply for all procurements to be made by a procurement entity and it cannot be for any length of time or eternally. Therefore, there must be application of mind by the State Government before a notification or an order is passed under clause (g). 14. In the instant case, the State Government has issued the notification impugned in these writ petitions with regard to the construction of a commercial complex envisaged by 8th respondent-Municipality. Therefore, that is a specific work or a procurement that the State Government has notified it as per Annexure-B to the writ petitions. The reason as to why the State Government notified it or the wisdom of the State Government for notifying this particular work under clause (g) of Section 4cannot be questioned unless it is established that any kind of mala fide intention was involved in invoking that clause. In the instant case, the invocation of clause (g) of Section 4 is only to hand over the construction of commercial complex i.e., the project to respondent 7, which is the Kolar Nirmithi Kendra, which is an entity functioning under the control of the 1st respondent. This is not a case where 8th respondent or respondent-authorities by invoking clause (g) of Section 4 intend to benefit any private person or entity as such. May be that respondent 10 had issued a communication dated 7-10-2014 Annexure-K, with regard to applicability of Chapter II-A of the Act.
This is not a case where 8th respondent or respondent-authorities by invoking clause (g) of Section 4 intend to benefit any private person or entity as such. May be that respondent 10 had issued a communication dated 7-10-2014 Annexure-K, with regard to applicability of Chapter II-A of the Act. But letter dated 7-10-2014 is after resolution was passed by 8th respondent on 18-8-2014 to hand over the construction of commercial complex to respondent 7-Nirmithi Kendra. 15. In that view of the matter, the invocation of clause (g) of Section 4 of the Act, in the instant case, cannot be held to be illegal, arbitrary or contrary to the provisions of the Act. It is also held that when once any of the clauses under Section 4 of the Act is invoked by the State Government, it would exclude applicability of not only Chapter II of the Act, but also Chapter II-A of the Act. One other contention raised by petitioners' Counsel was that resolution dated 18-8-2014 was not passed. When the petitioners have themselves filed a copy of the resolution dated 18-8-2014, they cannot now contend that the said resolution was not passed by respondent 8. Also learned Counsel for respondent 8 has produced a photocopy of the attendance register of 18-8-2014, on which date, petitioner 2 attended the proceedings of the 8th respondent on that day when the resolution was passed by it. In the result, there is no merit in the writ petitions. 16. Writ petitions are dismissed but without any order as to costs. In view of dismissal of writ petitions, I.A. No. II of 2015 for vacating interim order would not survive for consideration and is ordered to be filed. Petition Dismissed.