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2025 DIGILAW 304 (KAR)

G. S. Management Services Pvt Ltd. , Rep. By Its Managing Director Mr. H. S. Gopal v. Managing Director, Bescom, Corporate Service, K. R. Circle, Bengaluru

2025-06-10

S.RACHAIAH, V.KAMESWAR RAO

body2025
JUDGMENT : (V. KAMESWAR RAO, ACJ.) This writ appeal has been filed by the learned counsel for the appellant challenging the order dated 13.12.2023 passed by the learned Single Judge in WP No.8830/2023, whereby the learned Single Judge has disposed of the petition by stating in paragraph No.11 as under: “11. The extension in the considered view of this Court cannot run beyond the period for which the tender is itself called. This Court would not direct that the tender should be called in a particular manner, but the extension granted for two more years or the tender being invited for one year and extendable for two years needs to have a re-look by the respondents - BESCOM for it to escape non- arbitrariness. The BESCOM shall take note of the observations made in the course of the order and have a re-look at the conditions of tender in future. The impugned order does not warrant any interference.” 2. The aforesaid writ petition is a second round of litigation by the appellant. The first one being WP No.3206/2022, was decided by the learned Single Judge of this Court on 28.02.2022, whereby the learned Single Judge has dismissed the writ petition. The review petition filed thereof was also disposed of. 3. Some of the facts to be noted are, the respondents No.1 and 2 herein had, on 25.01.2022, issued a tender notification with reference No.BESCOM/BCP-1373/2021-2022 for availing Manpower services to 100 Seater 24 x 7 Customer Helpline at Center of Excellence, HSR Layout, Bangalore Electricity Supply Company Limited (‘BESCOM’ for short), Bengaluru for a total amount of Rs.20.97 Crores. On 07.02.2022, the appellant filed a writ petition being WP No.3206/2022 challenging the tender notification. The challenge to the same was primarily questioned on two grounds,- (i) as required under Rule 17 in Karnataka Transparency in Public Procurements Rules, 2000 (‘Rules of 2000’ for short); (ii) respondents No.1 and 2 have not provided 30 days’ time and further ground was that, under clause 5(10) of the tender notification, a tenderer having the annual turnover of not less than two times the amount put to tender in any two years during the last preceding five financial years is only qualified to submit his tender, is bad. 4. The case of the appellant was that, such a condition was put to favour certain tenderers and to keep the appellant out, who was existing provider. 4. The case of the appellant was that, such a condition was put to favour certain tenderers and to keep the appellant out, who was existing provider. 5. As stated above, on 28.02.2022, the WP No.3206/2022 came to be rejected by the learned Single Judge. The appellant filed a review petition being RP No.413/2022. A status-report was filed by the respondents No.1 and 2 stating that the tender tenure is going to expire/coming to an end, in view of the same, review petition came to be disposed of. Subsequent to the disposal of the review petition, the appellant in a representation dated 12.01.2023, requested respondent no.2 not to renew the contract in favour of respondent No.3. It was the case of the appellant that respondents No.1 and 2 without considering the representation dated 12.01.2023, had issued an extension order extending the contract for a period of two years and the same is contrary to Rules of 2000 or Karnataka Transparency in Public Procurements Act, 1999 (‘Act of 1999’ for short). It was in this background that a writ petition was filed by the appellant wherein the prayers made were the following : “WHEREFORE, it is most humbly and respectfully prayed that this Hon'ble Court may be pleased to : i) Issue a Writ Of Certiorari to Quash/Set-aside extensión order dated 10.03.2023 bearing no.BESCOM/GMP/DGMP/BC-10/2022-23/9139-44 issued by the 2nd respondent in favour of 3rd respondent vide Annexure A to the writ petition;consequently, ii) Issue a Writ Of Certiorari to quash Clause No.6 (32) Of General Conditions Of Instructions to Bidders irn Enquiry No.BESCOM/BCP-1373/2021-22 Vide Annexure-B iii) To Call for Entire Tender Records (Tender Proceedings) in Tender notification bearing reference no.BESCOM/BCP-1373/2021-22 dated 25.01.2022 vide ANNEXURE-B. iv) Issue a writ of mandamus directing the 2nd respondent to invite fresh tender proceedings in accordance with law in pursuance of representation dated 12.01.2023 given by the petitioner to the 2nd respondent vide ANNEXURE-K, with a word of caution, that no authority, whomsoever, should permit or tolerate any interference in the entire process, from anyone whomsoever, of any nature whatsoever and the eligibility/qualifying criteria should be scrupulously adhered to, in all aspects. v) To grant such other relief's as this Hon'ble Court deems fit in the facts and circumstances of the case, including award of the cost of these proceedings, in the interest of justice and equity.” A perusal of the prayer would show that the appellant had primarily challenged clause No.6(32) of general conditions. 6. The case of the appellant before the learned Single Judge was that, extending/renewing the contract for a period of two years is arbitrary. 7. On the other hand, the case of respondents No.1 and 2-BESCOM is that, the clause No.6(32) of the tender condition itself provide extension of contract by two years. It was stated that, the appellant itself was the beneficiary in the past of such extension on numerous occasions. Therefore, the appellant cannot now turn around and challenge the very clause, which had benefited it in the past. 8. The learned Single Judge has, in paragraphs No.8 to 10, stated as under: “8. I have given my anxious consideration to the submissions made by the learned senior counsel for the respective parties and have perused the material on record. 9. The afore-narrated facts are not in dispute and lie in a narrow compass. The notice inviting tender dated 25.01.2022, in which, respondent No.3 is awarded the contract, becomes the subject matter in W.P.No.3206/2022; this comes to be dismissed on 28.02.2022; a review petition comes to be filed, which also comes to be disposed in terms of the afore-quoted order. The impugned contract awarded to respondent No.3 is extended for a period of two years by the impugned communication. What requires to be noticed is, whether the BESCOM could have extended the term by two years and not call for a fresh tender. 10. It is trite that the Tender Inviting Authority is the best to impose such conditions in the tender according to its need. This Court would not step into the shoes of the Tender Inviting Authority and tinker those conditions except in cases where such actions would become arbitrary. What merits acceptance is, the submissions qua the impugned extension. The tender notification issued in the year 2022, in which certain clauses of the tender are germane to be noticed. "32. This Court would not step into the shoes of the Tender Inviting Authority and tinker those conditions except in cases where such actions would become arbitrary. What merits acceptance is, the submissions qua the impugned extension. The tender notification issued in the year 2022, in which certain clauses of the tender are germane to be noticed. "32. The Contract is for a period of ONE year from the date of contract order and based on the satisfactory performance, the same is extendable up to two more years at the same terms & conditions of the contract. In case of any unsatisfactory performance, BESCOM has the right to cancel the order without giving any notice. 28.0 This contract is for a period of 1 year from the date of contract order and based on the satisfactory performance, the same is extendable up to two more years at the same terms & conditions of the contract. In case of any unsatisfactory situations BESCOM has the right to cancel the order without giving any notice. Contract Agency and its employees has no right to disclose any Technical secrecy, Commercial secrecy and Social secrecy of BESCOM to others." (Emphasis added) The aforesaid clauses permit BESCOM to extend the contract which was initially for a period of one year and extendable for two more years on the same terms and conditions of the initial contract. The tender conditions in the contract is restricted for a period of one year is discernable and based on the performance of the contract, it is extendable to two more years. If the tender is called for one year and the criteria for awarding a contract in terms of the said tender is only for a period of one year, extending it on the same terms and conditions for a period of two years would not inspire confidence nor generate transparency in the procedure. Though this Court would not find any fault in the impugned tender, it is for the BESCOM to streamline the grant of extension for a period of two years, as the term for which the tender is notified is for one year, and the criteria is also assessed qua 12 months in the initial tender.” We have already reproduced paragraph No.11 of the judgment in the earlier paragraph. Submissions: 9. Submissions: 9. Now the submission of learned counsel for the appellant is primarily that, though the learned Single Judge has said that the tender is for one year, but the same cannot be extended for two years, the same would not inspire confidence, nor generate transparency in the procedure, but he has failed to quash the extension order dated 10.03.2023. According to him, the learned Single Judge has failed to direct respondents No.1 and 2 to issue a fresh tender. That apart it was his submission that, the learned Single Judge without disposing of the application filed under Order VI Rule 17 of CPC, has disposed of the writ petition and as such, failed to consider the grounds urged in the writ petition. It may be stated here, vide the application under Order VI Rule 17 of CPC, the appellant had primarily sought to incorporate prayers iv(a) and iv(b) in the following manner: “Proposed Amendment Add After Prayer iv & Substiute as: iv(a), Issue A Writ of Certiorari To Quash the financial criteria imposed at Sl.No.5(10) & 7(10) of Tender Notification bearing reference no.BESCOM/BCP-1373/2021-22 dated 25.01.2022 issued by the 2nd respondent (Vide Annexure-B) ie, "The Annual Financial Turnover Of the Bidder shall not be less than two times the amount put to tender in any two years during the last preceding five (5) financial years i.c, (2016-17, 2017-18, 2018-19, 2019-20 & 2020-21) tender notification dated25.01.2022 (ITB) iv(b). Issue a Writ Of Mandamus Directing the respondent no.1 and 2 to consider the bid of the petitioner if Participated in the tender invited pursuant to the order passed in this Writ Petition.” 10. His submission is also that, the object of Act of1999 is to prevent arbitrariness, irrationality, unreasonableness, bias and malafide. The purpose is to check whether the choice of decision is made lawfully and not to check whether the choice of decision is sound. A fair play is necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere, which is missing in the present case. The extension order dated 10.03.2023 issued by respondents No.1 and 2 in favour of respondent No.3 is a malafide exercise of power. Hence, interference is required. He stated that, the impugned order passed by the learned Single Judge is liable to be set aside being without merit. 11. The extension order dated 10.03.2023 issued by respondents No.1 and 2 in favour of respondent No.3 is a malafide exercise of power. Hence, interference is required. He stated that, the impugned order passed by the learned Single Judge is liable to be set aside being without merit. 11. On the other hand, learned counsel for respondents No.1 and 2 would justify the impugned order passed by the learned Single Judge by stating as under: I. Brief facts BESCOM operates a 100-seater, 24x7 customer helpline at Centre of Excellence, HSR Layout, Bengaluru to receive, register and close complaints received from consumers. To avail manpower services to operate the said facility, respondent No.2 issued a tender notification dated 25.01.2022 and invited tenders from eligible bidders. The amount put to tender was Rs.20.97 crore. As per clause 6(32) of the General Conditions of the Instructions to bidders and clause 31 of the Detailed Work Award, the contract was for a period of one year, which was extendable up to two more years on the same terms and conditions. Sl.Nos.5(10) and 7(10) of the qualifying requirements lays down the financial criteria of the bidder. Sl.Nos.5(10) and 7(10) require that the annual financial turnover of the bidder should not be less than two times the amount put to tender in any two years during the last preceding five years. The tender was awarded to respondent No.3 vide Letter of Intent dated 14.02.2022. Thereafter, Detailed Work Award was issued to respondent No.3 on 19.02.2022. The contract was initially awarded for a period of one year from 01.03.2022 to 28.02.2023. Respondent No.3, on 09.01.2023, had issued a letter to respondent No.2 seeking extension of the contract for a further period of 2 years. The General Manager, Customer Relations, BESCOM issued a certificate on 16.01.2023 stating that the services rendered 24 x 7 by respondent No.3 were satisfactory till date. Thereafter, respondent No.2, after following due procedure and after considering all the material on record, issued an Official Memorandum dated 10.03.2023 granting approval to extend the contract period with respondent No.3 for a period of two years i.e., from 01.03.2023 to 28.02.2025. II. Proceedings before the Learned Single Judge The appellant had filed a writ petition being WP No.3206/2022 challenging the financial condition imposed by respondent No.1 and 2. The appellant contended that the financial condition imposed was arbitrary and unreasonable. II. Proceedings before the Learned Single Judge The appellant had filed a writ petition being WP No.3206/2022 challenging the financial condition imposed by respondent No.1 and 2. The appellant contended that the financial condition imposed was arbitrary and unreasonable. This Court vide order dated 28.02.2022 was pleased to dismiss the writ petition. The learned Single Judge held that no error or fault can be found with the actions of respondents No.1 and 2 and that the appellant had failed to demonstrate how the financial condition would favour some and eliminate others. The appellant sought review of the order dated28.02.2022 in RP No.413/2022. The same was disposed of vide order dated 04.01.2023 by clarifying that the observations made in the order are on the fact situation of the present case. The appellant filed another writ petition being WP No.8830/2023 seeking quashing of the extension order dated 10.03.2023 issued by respondent No.2 in favour of respondent No.3 and for a writ of certiorari to quash Clause 6(32) of the General Conditions of Instructions to Bidders. The appellant contended that the extension given to respondent No.3 was malafide. This Court vide order dated 28.02.2022, had disposed of the writ petition. The learned Single Judge held that the extension order does not warrant any interference. The said order is impugned in the present writ appeal. III. Contentions of respondents No. 1 and 2 Granting extension is permissible under the contract Clause 6(32) of the General Conditions of the Instructions to Bidders and clause 31 of the Detailed Work Award categorically state that the contract is for a period of one year, which can be extended up to two more years on the same terms and conditions. The option of granting extension to the successful bidder is at the discretion vested with the respondent authorities and the appellant cannot coerce the respondent authorities to exercise this discretion in a particular manner. Moreover, the services being rendered by respondent No.3 are required continuously to address the grievances faced by consumers. The extension granted to respondent No.3 was during the summer months when the number of complaints received increases exponentially. The decision to grant extension to respondent No.3 was taken only after considering all aspects. Moreover, the services being rendered by respondent No.3 are required continuously to address the grievances faced by consumers. The extension granted to respondent No.3 was during the summer months when the number of complaints received increases exponentially. The decision to grant extension to respondent No.3 was taken only after considering all aspects. Most importantly, the performance of respondent No.3 was evaluated and only after obtaining information regarding the satisfactory rendering of services by respondent No.3 that respondent No.2 proceeded to extend the period of contract. The Hon'ble Supreme Court in Shagun Mahila Udyogik Sahakari Sanstha Maryadit -Vs.- State of Maharashtra and others [ (2011) 9 SCC 340 ] upheld the awarding of contract for one year and then extending it for two more years upon satisfactory performance. The appellant has been the beneficiary of extension orders previously The appellant has suppressed the fact that it was granted three extension orders from 01.03.2019 to 28.02.2022 while it was providing service. The appellant on the one hand accepted the extensions during its tenure and on the other hand has challenged the extension granted to respondent No.3. The fact that the appellant is seeking to approbate and reprobate as per its conveniences should be deprecated. Extension clause not challenged in the first writ petition The appellant did not challenge the extension clause in WP No.3206/2022 and challenged it for the first time in WP No.8830/2023. The appellant having failed to challenge the contract awarded to respondent No.3 in 2022, cannot be permitted to challenge the extension given to respondent No.3 on 10.03.2023. Financial condition is not arbitrary Sl.Nos.5(10) and 7(10) of the qualifying requirements lays down the financial condition. The above-mentioned requirements are based on Government Order dated 14.10.2008 and BESCOM Circular dated 09.09.2020. For works costing above Rs.10 crore, in cases like the present one, the tenderer should have in the last five years achieved at least two financial years, a minimum financial turnover of not less than two times the estimated annual payments under the contract. It is submitted that the Government Order and BESCOM Circular were merely followed in the present tender notification. Respondents No.1 and 2 invited tender for a100-seater customer helpline for the first time in 2022. The previous tender was for a lesser number of personnel. It is submitted that the Government Order and BESCOM Circular were merely followed in the present tender notification. Respondents No.1 and 2 invited tender for a100-seater customer helpline for the first time in 2022. The previous tender was for a lesser number of personnel. The financial conditions mentioned in the tender notification were to ensure that the contractor had the capacity and resources to successfully execute the work. The increase in the requirement for manpower justifies the requirement of a higher financial capacity.Hence, there is no arbitrariness in the same. Respondents No.1 and 2 has produced other tenders to demonstrate that the said financial condition has not been imposed for the present tender only. This Court in A. Naveenchandra -Vs.- Karnataka Neeravari Nigam Limited, Bangalore and others [2016 SCC OnLine Kar 8659] has held that the tender condition seeking minimum turnover cannot be said to be arbitrary. Locus standi of the appellant The appellant did not participate in the tender process and did not submit the bids in the e-procurement portal. It is settled law that a tenderer who does not participate in the tender process has no locus standi to question the tender. Ref: Judgment of the Hon’ble Supreme Court in the case of National Highways Authority of India -Vs.- Gwalior-Jhansi Expressway Limited and judgment of this Court in the case of Mahalakshmi Engineering Works and another -Vs.- Bangalore Electricity Supply Company Limited [WP No.17266/2022 , decided on 09.11.2022 Scope of inquiry The scope of inquiry of Courts in commercial matters and tender proceedings is very narrow. Ref: Judgment of the Hon’ble Supreme Court in the case of Michigan Rubber (India) Limited -Vs.- State of Karnataka and others [ (2012) 8 SCC 216 ] . While formulating conditions of a tender document and awarding of contract, greater latitude is required to be conceded to the State authorities. Ref: Judgment of the Hon’ble Supreme Court in the case of Association of Registration Plates -Vs.- Union of India and others [ (2005) 1 SCC 679 ] and judgment of this Court in the case of T.S. Narayana and others -Vs.- Chamundeshwari Electricity Supply Corporation Limited and another [2019 SCC OnLine Kar 3889] There has been no flouting of tender conditions or favouritism as such in the present tender. The appellant cannot insist on requirements which would be beneficial to it or seek directions to draft conditions which are tailor made to suit its requirements. Decision Oriented Systematic Analysis (DOSA) Mere fact of less participation in a tender does not ipso facto mean that the terms and conditions of the tender have followed a DOSA and were intended to favour a particular bidder. Ref: Judgment of the Hon’ble Supreme Court in the case of Uflex Limited -Vs.- Government of Tamil Nadu and others [(2022) 1 SCC 165] . Contrary to what is claimed by the appellant, the present tender was not a single bid tender. Apart from respondent No.3, KEONICS had also submitted a bid. Savings to the State exchequer By comparing the rates issued in the earlier Detailed Work Award with the rates issued in the present Detailed Work Award, it is clear that the rates awarded in 2022 to respondent No.3 is less compared to that awarded in 2018 to the appellant. The same is demonstrated in the table produced by respondent No.1 and 2 along with the Statement of Objections. Therefore, the extension granted to respondent No.3 has not caused any financial loss to the State. Dispute raised by the appellant has been rendered academic The tender awarded to respondent No.3 was initially for a period of one year from 01.03.2022 to 28.02.2023. Respondent No.3 was granted an extension for two years from 01.03.2023 to 28.02.2025. The term of the contract awarded to respondent No.3 has almost come to an end and the dispute raised by the appellant has been rendered academic. It is settled law that if an issue is purely academic, it would be futile for the Courts to decide the academic question. The entire tender process was conducted in a fair and transparent manner, following all the requirements laid down in law. The extension order was also issued in compliance with all due procedures. The contract entered into with respondent No.3 permits the extension of contract by a further period of two years. The appellant cannot interfere with the contractual rights of the respondents. Moreover the appellant has, in the past, been a beneficiary of such extensions awarded to the existing contractor. The extension order was also issued in compliance with all due procedures. The contract entered into with respondent No.3 permits the extension of contract by a further period of two years. The appellant cannot interfere with the contractual rights of the respondents. Moreover the appellant has, in the past, been a beneficiary of such extensions awarded to the existing contractor. In view of the fact that the process did not suffer from any vitiating factors and in the absence of any material evidence to prove the same, the relief sought cannot be granted. Most of the contentions raised by the appellant are in the nature of re-agitating the issues already decided by this Court in WP No.3206/2022. Thus, seen from any angle, the appellant has not made out any grounds whatsoever to allow the present appeal and hence, the same is liable to be dismissed. 12. In support of his submissions, he has also relied upon the judgments of the Hon’ble Supreme Court in the cases of N.G. Projects Limited -Vs.- Vinod Kumar Jain and others [ (2022) 6 SCC 127 ] and Silppi Constructions Contractors -Vs.- Union of India and another [ (2020) 16 SCC 489 ] and order of this Court in the case of M/s. Arya Electrical -Vs.- The State of Karnataka and others [2014 SCC OnLine Kar 920]. Analysis: 13. Having heard the learned counsel for the parties, at the outset we may state here that, we have already reproduced the conclusion drawn by the learned Single Judge in the impugned order. Respondents No.1 and 2 are not in appeal against the order passed by the learned Single Judge. 14. The facts aforesaid reveal that, the writ petition which was decided by the learned Single Judge is a second round of litigation. In the earlier round of litigation, the challenge was made only with regard to provisions of the Rules of 2000 and Act of 1999 and also the financial eligibility conditions put by respondents No.1 and 2 in the tender, with an allegation that it is only to favour certain third-persons. It may be stated here that, there is no challenge made to clause 6(32) as has been done in the second writ petition. The said writ petition came to be dismissed. Even the review petition filed by the appellant came to be disposed of. It may be stated here that, there is no challenge made to clause 6(32) as has been done in the second writ petition. The said writ petition came to be dismissed. Even the review petition filed by the appellant came to be disposed of. It may be stated, the challenge in this writ petition to the extension clause was hit by principles of constructive res judicata. In any case it appears that, because of the eligibility condition, the appellant had not applied for the tender and as such, the locus of the appellant to file the writ petition was urged. 15. In any case, the appellant had filed a writ petition challenging the said condition. The appellant was not successful both in the writ petition and review petition. It is thereafter that a fresh writ petition has been filed. The extension granted to respondent No.3 was challenged by the appellant with a further prayer that the respondents No.1 and 2 should invite fresh tender. The issue before the learned Single Judge was whether clause 6(32) of the general conditions of instructions is illegal and arbitrary. 16. The learned Single Judge has made certain observations in respect to such condition in paragraphs No.8 to 11 of the impugned order, which we have already reproduced. So in that sense, whether the extension granted by BESCOM to respondent No.3 is justified, the learned Single Judge has, in paragraph No.10, held that, the tender inviting authority is the best position to impose such conditions in the tender according to its need. He also held that, the Court would not find fault in the impugned tender. It is for the BESCOM to streamline the grant of extension for a period of two years, as the term for which the tender is notified is for one year, and the criteria is also assessed qua 12 months in the initial tender. He has finally said that, the impugned order seeking granting quashing of extension of time cannot be interfered with. If the aforesaid being the basis for the learned Single Judge not to interfere with the impugned action under challenge before him, we are of the view that the said conclusion of the learned Single Judge in the facts of this case and the law that we have noted above, is justified. 17. If the aforesaid being the basis for the learned Single Judge not to interfere with the impugned action under challenge before him, we are of the view that the said conclusion of the learned Single Judge in the facts of this case and the law that we have noted above, is justified. 17. That apart, the plea, that the application for amendment under Order VI Rule 17 of CPC was not considered is concerned, we are of the view, the amendments sought could not have been granted for the reason, prayer iv(a) is a challenge to the eligibility, which has attained finality in the first round of litigation and the second prayer [iv(b)] cannot be granted as the same does not arise from the prayers in the writ petition. 18. The appeal being without merit, is dismissed.