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Karnataka High Court · body

2019 DIGILAW 1383 (KAR)

S. K. Madar v. Karnataka Vishwa Vidyalaya

2019-06-21

S.G.PANDIT

body2019
JUDGMENT : S.G. Pandit, J. Even though the matter is listed for orders, with the consent of the parties, the writ petitions are taken up for final disposal. Since the subject matter of both the writ petitions are one and the same, both writ petitions are disposed of by this common order. 2. The petitioners in W.P.Nos.105709-710/2019 have filed the writ petitions under Article 226 of the Constitution of India praying for the following reliefs. (a) Declare that the allotment of e-procurement tender for supply of man power pursuant to package Nos.1 to 5 to the Respondent Nos.3 and 4 being illegal, arbitrary and contrary to the provisions of the Karnataka Transparency in Public Procurements Act, 1999 read with Karnataka Transparency in Public Procurements Rules, 2000, in the interest of justice and equity. (b) Issue Writ in the nature of Certiorari to quash the impugned order dated 29.01.2019 brg. No. KVV/Building/2018-19/937 passed by the Respondent No.2 vide Annexure-E, in the interest of justice and equity. (c) Issue Writ in the nature of Mandamus directing the Respondent No.2 to call a fresh tender supply of man power in respect of package Nos.1 to 5 for pursuant to the Notification dated 15.10.2018 vide Annexure-A, in the interest of justice and equity. - - - 3. The petitioners in W.P.No.107541/2018 and W.P. No.107702/2018 filed writ petitions under Article 226 of the Constitution of India praying for the following reliefs. (1) Issue a writ in the nature of Certiorari or any other appropriate writ, order or direction and quash the notification bearing No. KaViVi/ Kattada/Tender/Nairmaleekarana/2018-19/ 643 dated 15.10.2018 passed by the respondent No.2 produced at Annexure-D in the interest of justice and equity. - - - 4. The second petitioner in W.P.Nos.107509-710/2019 is the first petitioner in W.P.No.107541/2018 and W.P.No.107702/2018. The respondent-University on 15.10.2018 called for short term tender by e-procurement for a period of 12 months in respect of supply of man power for maintenance of different wings of the University buildings under five packages. Last date for submitting the tender was 09.11.2018 which was extended upto 17.11.2018. It is stated that the petitioners being in the field of supplying man power submitted their e-tender to the respondent-University. Further, it is stated that the first petitioner applied for package numbers 3 and 4 and second petitioner applied for package No.2. Last date for submitting the tender was 09.11.2018 which was extended upto 17.11.2018. It is stated that the petitioners being in the field of supplying man power submitted their e-tender to the respondent-University. Further, it is stated that the first petitioner applied for package numbers 3 and 4 and second petitioner applied for package No.2. Third respondent applied for package Nos.1 and 5 and the respondent No.4 applied for package Nos.1 to 5. 5. As per the tender notification tender was invited from the Contractors who are registered with the Labour Department and also the Contractor was required to submit VAT Clearance certificate and I.T. Returns for the last three years. The date for opening the tender was 19.11.2018 but the tender was opened on 20.11.2018 in the presence of the tenderers. 6. It is the case of the petitioners that on scrutiny of tender documents the first respondent-University noted that the respondent Nos.3 and 4 are not qualified. Again the petitioners and other tenderers were called on 12.12.2018. On that day, the University on scrutiny found certain of the Contractors qualified for certain of the packages. But finally decision was taken on technical reasons to recall the tender. As the University had taken decision to recall the tender the petitioners were under the impression that the tender notification will be reissued. But, however on 29.01.2019 the first and second respondents issued work order to respondent No.3 in respect of package No.3 and work order was issued to respondent No.4 in respect of package Nos.1 to 3. Aggrieved by the acceptance of tender in favour of respondent Nos.3 and 4 and issuance of work order, the petitioners are before this Court in W.P. Nos.105709-710/2019. 7. W.P. No. 107541/2018 and W.P. No. 107702/2018 are filed on 06.11.2018 challenging the notification dated 16.10.2018 calling for e-procurement. This Court, by order dated 27.11.2018 permitted the petitioners to serve copies of the writ petitions on the learned counsel appearing for the University. W.P.Nos.105709-710/2019 came up for preliminary hearing before this Court on 07.02.2019. On 07.02.2019 this Court directed the learned Standing Counsel for the respondent Nos.1 and 2 to take notice and issued notice to respondent Nos.3 and 4. Further, this Court directed the respondents not to finalize the tender in favour of disqualified candidates. 8. On appearance, the respondents filed their statement of objections. On 07.02.2019 this Court directed the learned Standing Counsel for the respondent Nos.1 and 2 to take notice and issued notice to respondent Nos.3 and 4. Further, this Court directed the respondents not to finalize the tender in favour of disqualified candidates. 8. On appearance, the respondents filed their statement of objections. The respondent-University in its statement of objections mainly contended that the tender was finalized on 25.01.2019 and work order was issued on 29.01.2019, i.e., prior to filing of the writ petitions and passing of the interim order on 07.02.2019. It is contended that, since the tender was already finalized and work order is issued, the writ petition under Article 226 of the Constitution of India is not maintainable since the petitioners have alternative remedy under The Karnataka Transparency in Public Procurements Act, 1999 (for short 'Act'). 9. It is also stated that the tender relates to contract work of cleaning and sanitization of the various buildings of the University, as such, there was need to finalize the tender. The respondent Nos.3 and 4 are the lowest bidders and in the interest of the University, their tenders are accepted. Even though the Resident Engineer, who is the tender inviting authority was of the opinion that, for technical reasons the tenders are to be recalled, but when the file was placed before the Registrar taking into consideration the urgent need, the Registrar asked to re-put-up the file. Thereafter the file was placed before the Vice Chancellor and considering the urgency and necessity of cleaning and sanitization the tender was awarded to lowest tenderers, i.e., respondent Nos.3 and 4. It is stated that action of the respondent-University is fully transparent and have not committed any illegality or violated any Rules. The decision taken is in the best interest of the University. 10. Subsequently, the petitioners have filed application I.A. No. 3/2019 for amendment of Writ Petitions seeking to incorporate certain facts and also seeking additional prayer to quash Annexure-H wherein decision was taken to award tender to respondent Nos.3 and 4 and also for a mandamus to call fresh tender for supply of man power. 11. Heard the learned counsel for the parties and perused the writ petition papers. 12. Learned counsel Sri F.V. Patil, appearing for the petitioners would submit that entire action of the respondent-University is not transparent and the same is wholly arbitrary. 11. Heard the learned counsel for the parties and perused the writ petition papers. 12. Learned counsel Sri F.V. Patil, appearing for the petitioners would submit that entire action of the respondent-University is not transparent and the same is wholly arbitrary. It is contended that the Resident Engineer is the tender inviting authority and he has the power either to accept or reject the tender without assigning any reasons. He invites the attention of this Court to Clause 24 of Annexure-A wherein it is stated that the tender inviting authority has power to accept or reject the tender without assigning any reasons. Hence, he submits that the Resident Engineer, who is the tender inviting authority had taken a decision on 12.12.2018 on technical reasons to recall the tender. The petitioner has produced Annexures F1, G and H, the note sheets of the University, wherein the decision to award the tender to respondent Nos.3 and 4 is taken. From the said documents he points out that the respondent Nos.3 and 4 were not qualified on initial scrutiny of their documents whereas subsequently they were shown as qualified and they were the lowest tenderers. 13. It is his submission that since the tender inviting authority, the Resident Engineer, had taken decision to recall the entire tender, the University could not have proceeded further in the process of tender and award the same to respondent Nos.3 and 4. It is his submission that if an opportunity had been granted to respondent Nos.3 and 4 to cure any defect it should have been extended to all the tenderers. Further, the learned counsel contended that the alternative remedy of appeal provided under the Act is not applicable to the Universities and alternatively he submits that such a remedy is not the alternative efficacious remedy. Since action of the respondent-University is not transparent and is in violation of provisions of the Transparency Act, the writ would be maintainable. In support of his submission he placed reliance upon the decision of the High Court of Allahabad reported in MANU/UP/0996/2009. Thus prays for allowing the writ petitions. 14. Per contra, learned counsel appearing for the University would contend that the writ petition itselfis not maintainable in view of the alternative remedy available to the petitioner under the Act. In support of his submission he placed reliance upon the decision of the High Court of Allahabad reported in MANU/UP/0996/2009. Thus prays for allowing the writ petitions. 14. Per contra, learned counsel appearing for the University would contend that the writ petition itselfis not maintainable in view of the alternative remedy available to the petitioner under the Act. He submits that the writ petitions are filed subsequent to finalization of the tender and after issuance of work order to respondent Nos.3 and 4. He states that the tender was finalized on 25.01.2019 and work order was issued on 29.01.2019 whereas the writ petition was filed on 06.02.2019 without disclosing finalization of the tender. It is his submission that the second petitioner is the successful tenderer for the previous year and he is the contractor carrying on the cleaning work for the last 20 years and only with a view to continue further the present writ petitions are filed. 15. It is also submitted by the learned counsel for the University that the second petitioner is also a petitioner in the connected Writ Petitions in W.P. No. 107541/2018 and W.P. No. 107702/2018. But in subsequent writ petitions the petitioners have suppressed the filing of the earlier writ petitions only with a malafide intention. There is suppression of fact by the petitioners. Further, it is stated that the respondent Nos.3 and 4 are the lowest bidders and as such they are awarded with the tender. 16. It is his submission that since there was doubt about the GST certificate submitted by the respondent Nos.3 and 4 they were shown as not qualified when scrutiny was taken up on 12.12.2018. Subsequently, the University got clarified the same from the Tax Department and as such respondent Nos.3 and 4 being the lowest bidders were awarded the work. 17. The learned counsel further submits that the Resident Engineer is the Tender Inviting Authority and whereas the Vice Chancellor is the Tender Accepting Authority. He invites the attention of this Court to Rule 24 of Karnataka Transparency in Public Procurements Rules, 2000 (for short 'Rules'). As per Rule 24 the Tender Inviting Authority shall cause an initial examination of the tenders. Subsequently, under Sub-Rule 3 the power of rejecting any tender is with the Tender Accepting Authority. 18. He invites the attention of this Court to Rule 24 of Karnataka Transparency in Public Procurements Rules, 2000 (for short 'Rules'). As per Rule 24 the Tender Inviting Authority shall cause an initial examination of the tenders. Subsequently, under Sub-Rule 3 the power of rejecting any tender is with the Tender Accepting Authority. 18. Learned counsel appearing for the respondent Nos.3 and 4 supported the arguments submitted by the learned counsel for the University. Further, the learned counsel for the respondent No.3 submitted that when the statute itself provides for an alternative remedy, the aggrieved shall avail such alternative remedy and the writ petitions would not be maintainable. He submits that there is no defect in the tender documents submitted by the respondent Nos.3 and 4 and the documents were in order. The GST certificate submitted by the respondent Nos.3 and 4 indicate that there is no due with regard to GST. It is also submitted that in pursuance to work order, the respondent Nos.3 and 4 deposited the guarantee amount with the University. Thus prays for dismissal of the writ petitions. 19. On hearing the learned counsel for the parties and on scrutiny of the materials on record, the questions which arise for consideration are as to: (1) Whether in the facts and circumstances of the case the petitioners are to be relegated to avail the alternative remedy of appeal? (2) Whether the petitioners are entitled to relief as sought for in the writ petitions? - - - 20. The answer to both the above questions are in the negative for the following reasons. 21. The petitioners have questioned the award of contract and issuance of work order to respondent No.3 in pursuance to tender notification dated 15.10.2018. In the tender process the Courts should not lightly interfere with the decision taken by the authorities. Exercise of jurisdiction under Article 226 of the Constitution of India in the matter of tender process is very limited. The Courts would examine only the decision making process and the Courts under Article 226 of the Constitution of India would not act as an appellate Court to evaluate the decision of the respondent authorities unless it is shown that the decision taken by the respondent authorities are totally arbitrary and unreasonable. Judicial review in the matter of tender process would be examined by the Courts in a very limited manner. Judicial review in the matter of tender process would be examined by the Courts in a very limited manner. Keeping these principles in mind the facts of the present case will have to be examined. 22. The respondent University invited tender by e-procurement under Notification dated 15.10.2018. In pursuance to the said notification the petitioners as well as respondent Nos.3 and 4 participated in the tender process. It is not in dispute that the tender was opened on 20.11.2018 in the presence of all the parties who had participated in the tender. On 12.12.2018 the tender inviting authority, i.e., the Resident Engineer of the respondent No.1-University on the note put up, took decision to recall the tender due to technical reasons. Further, the Registrar noted "Discussion and was asked to re-put-up the file". Accordingly, the file was re-put-up and the Resident Engineer again noted that due to technical reason, tenders may please be recalled. But when the file was placed before Vice-Chancellor, Tender Accepting Authority, he noted "Re-put-up the file as discussed". Again, the file was put up and decision was taken to award contract to lowest tenderers, i.e. respondent Nos.3 and 4. 23. It is the case of the petitioners that since the respondent Nos.3 and 4 were initially noted as not qualified, were noted as qualified subsequently. The second petitioner in the first instance, had filed W.P. No. 107541/2018 and W.P. No. 107702/2018 challenging the tender notification dated 15.10.2018 itself. Having failed to secure any interim order in the said writ petition, suppressing filing of the writ petitions, the second petitioner along with the first petitioner filed W.P. Nos.107509-510/2019 challenging the work order issued to the respondent Nos.3 and 4 and to declare allotment of e-procurement tender for supply of manpower to respondent Nos.3 and 4 as illegal and arbitrary. 24. By the time the writ petitions were filed, the tender process was finalized on 25.01.2019 and work orders were issued on 29.01.2019 in favour of respondent Nos.3 and 4. Section 16 of the Act provides for appeal. Any tenderer aggrieved by an order passed by the Tender Accepting Authority, other than the Government, may appeal to the prescribed authority within the time prescribed therein. Section 16 of the Act provides for appeal. Any tenderer aggrieved by an order passed by the Tender Accepting Authority, other than the Government, may appeal to the prescribed authority within the time prescribed therein. The learned counsel for the petitioner submitted that in the facts of the present case, the alternate remedy of appeal is not an effective and efficacious remedy, since it is a short term tender for one year for cleaning and sanitization of various buildings of the respondent-University. There is some force in the submission of the learned counsel for the petitioner. It is a short term tender and notification is of October, 2018 and tender is finalized in the month of January, 2019. For the previous year tender was awarded in favour of 2nd petitioner and even after expiry of his tender he is continued since the subsequent tender is questioned in these writ petitions. Therefore, any further delay in finalizing the tender would be against the public interest. Availability of alternative forum would not oust jurisdiction of Writ Court from entertaining the Writ Petition. At this length of time, it may not be proper for this Court to relegate the parties to appeal remedy keeping in mind the nature of tender called for by the respondent-University and the period for which the tender is called for. Hence, in the facts of the present case, I am of the view that the Writ Petitions would be maintainable and requires to be examined on merit. 25. From Annexure-A tender notification it could be seen that the Resident Engineer of the 1st respondent University is the Tender Inviting Authority. Whereas the Vice Chancellor of the University is the Tender Accepting Authority. The learned counsel for the petitioner contended that the Resident Engineer-Tender Inviting Authority has the power to accept or reject tender as per the tender notification. The Tender Inviting Authority had come to the conclusion that for technical reasons tender is to be recalled. Hence, the University could not have proceeded further. To examine this contention, Rule 24 of the Karnataka Transparency in Procurements Rules, 2000 (for short 'Rules') requires to be taken note of, which reads as under: 24. Initial examination to determine substantial responsiveness: - (1) The Tender Inviting Authority shall cause an initial examination of the tenders submitted to be carried out in order to determine their substantial responsiveness. To examine this contention, Rule 24 of the Karnataka Transparency in Procurements Rules, 2000 (for short 'Rules') requires to be taken note of, which reads as under: 24. Initial examination to determine substantial responsiveness: - (1) The Tender Inviting Authority shall cause an initial examination of the tenders submitted to be carried out in order to determine their substantial responsiveness. (2) During the initial examination the following factors shall be considered, namely: - (a) Whether the tenderer meets the eligibility criteria laid down in the tender documents; (b) Whether the crucial documents have been duly signed; (c) Whether the requisite earnest money deposit has been furnished; (d) Whether the tender is substantially responsive to the technical specifications set out in the bidding documents including the testing of samples where required. (3) Tenders which on initial examination are found not to be substantially responsive under any of the clauses under sub-rule (2) may be rejected by the Tender Accepting Authority. - - - 26. The reading of the above rule would indicate that the Tender Inviting Authority is empowered to initially examine the tender submitted to determine their substantial responsiveness. Rule also would indicate the factors which are to be considered for initial examination. Sub Rule 3 would indicate that tenders which are on initial examination are found not to be substantially responsive may be rejected by the Tender Accepting Authority. 27. Rule 24 gives power to Tender Inviting Authority to initially scrutinize tender and empowers Tender Accepting Authority to reject the same if it is found defective. Rule 24 would not invest power to reject the tenders if it is not substantially responsive with the Tender Inviting Authority. It is only the Tender Accepting Authority who could reject the tenders. 28. In the case on hand the specific case of the petitioner is that the Resident Engineer who is the Tender Inviting Authority has noted for the reasons known to him that as the tender is to be recalled due to technical reasons. But the contention of the petitioner that Clause 24 of tender notification would empower the Resident Engineer to reject the tenders or to accept the tender without assigning any reasons. Therefore, the tenders ought to have been recalled, cannot be accepted in view of Sub-rule (3) of Rule 24 of the Rules. 29. But the contention of the petitioner that Clause 24 of tender notification would empower the Resident Engineer to reject the tenders or to accept the tender without assigning any reasons. Therefore, the tenders ought to have been recalled, cannot be accepted in view of Sub-rule (3) of Rule 24 of the Rules. 29. Rule 24 of the Rules specifically empowers the Tender Accepting Authority to reject the tenders for any reasons but would not empower the Tender Inviting Authority to reject the tenders. Therefore, the contention of the learned counsel for the petitioners that as opined by the Resident Engineer the tenders ought to have been recalled, is rejected. 30. The next contention urged by the learned counsel for the petitioners is that, initially respondent Nos.3 and 4 were shown as not qualified during initial scrutiny and subsequently they were shown as qualified and they were awarded with the tender work. It is not the case of the petitioner that he is the lowest tenderer and tender has been awarded to respondent Nos.3 and 4 only with a view to favour them. 31. The learned counsel for the respondent-University submitted that the respondent Nos.3 and 4 are the lowest tenderers and initially they were shown as not qualified due to misreading of the GST certificate submitted by them. On verification of GST certificate submitted by them it was in the required format and hence they were shown as qualified. 32. It is also submitted by the counsel for the University that there was no defect in the tender document submitted by the respondent Nos.3 and 4. The University and its technical officers who are expert in the field have independently evaluated the technical bids and financial bids of the parties and they have arrived at a conclusion that respondent Nos.3 and 4 are the lowest bidders and have awarded the contract. 33. This Court cannot sit in appeal over the decision of the respondent University over the decision taken to award the contract in favour of respondent Nos.3 and 4. The University in the interest of public, within its competence has arrived at a decision which needs no interference. The nature of contract as observed above is for cleaning and sanitization of the University buildings for a period of 12 months. The tender was invited in the month of October 2018. Already nine months have elapsed. The University in the interest of public, within its competence has arrived at a decision which needs no interference. The nature of contract as observed above is for cleaning and sanitization of the University buildings for a period of 12 months. The tender was invited in the month of October 2018. Already nine months have elapsed. Taking into consideration the short term tender and nature of the tender work it may not be proper for this Court to interfere at this stage. The decision arrived at by the University is neither arbitrary or irrational. The public interest should prevail over the individual or private interest. 34. The Hon'ble Supreme Court in a case reported in (Jagdish Mandal Vs. State of Orissa and Others, (2007) 14 SCC 517 ), at paragraph No. 22 has held as follows: "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is made 'lawfully' and not to check whether choice or decision is 'sound'. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions : (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. ' (ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving black-listing or imposition of penal consequences on a tenderer/contractor or distribution of state largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action. - - - The Hon'ble Supreme Court has made it clear that if the award of contract is bonafide and it is in public interest, Courts will not interfere, even if procedural aberration is made out. In the present case looking into nature of work involved in the tender and as the tender is awarded to lowest tenderers, I am of the view that award of tender to respondent Nos.3 and 4 is bonafide and is in public interest. The second petitioner who is the successful tenderer for the previous year is before this Court in this Writ Petition only to prevent the respondent University from finalizing the tender process. Initially he filed W.P. No. 107541/2018 and W.P. No. 107702/2018 challenging the tender notification itself. The petitioner therein failed to obtain any interim in the said writ petition. Subsequently, the second petitioner along with the petitioner No.1 filed W.P. Nos.105709-710/2019 challenging awarding of contract in favour of respondent Nos.3 and 4 and also work order issued in their favour. While filing the present writ petitions the petitioners suppressed the material fact, and failed to disclose filing of the W.P. No. 107541/2018 and W.P. No. 107702/2018 challenging the tender notification and pendency of said writ petition. While filing the present writ petitions the petitioners suppressed the material fact, and failed to disclose filing of the W.P. No. 107541/2018 and W.P. No. 107702/2018 challenging the tender notification and pendency of said writ petition. The intention of the second petitioner is clear that as long as the tender process is postponed, he would be in a position to continue with the work based on previous year tender. For all the above reasons I am of the view that the petitioners are not entitled for any of the reliefs sought for by them in the above writ petitions. Accordingly, both the writ petitions are dismissed.