Hind Metals, By Their Proprietors, R. Sikandar Basha, R/By Peer Nasir Khan v. State of Karnataka, Represented By Its Principal Secretary, Department of Home And Transport
2025-06-24
PRADEEP SINGH YERUR
body2025
DigiLaw.ai
ORDER : (PRADEEP SINGH YERUR, J.) Heard learned senior counsel Sri Rajesh Mahale, on behalf of learned counsel Sri Sadiq N. Goodwala for petitioners and the learned counsel Sri Mohammad Akram Uppin on behalf of learned counsel Sri R.Kothwal, for respondent No.4 as well as the learned counsel Sri Prashant Hosmani, for respondent No.2. 2. This petition is filed by petitioners seeking to quash the letter of acceptance dated 19.05.2025 issued by respondent No.3 in favour of respondent No.4. 3. It is the contention of learned senior counsel Sri Rajesh Mahale that respondent No.1 has issued Scraping Policy of Karnataka, 2022 and it is enumerated at Clause 5 with regard to eligibility criteria for setting up of RVSF and he relies on Clause 5(a) to show that the applicant should have office in Karnataka. This being so, respondent No.3 has issued letter of acceptance in favour of respondent No.4 in violation of the Karnataka Scrapping Policy, 2022 and consequently, in view of issuance of the letter of acceptance, petitioners have approached this Court as the same is in contravention to the policy of the State and the Central Government Rules. Therefore, it is contended by learned senior counsel that respondent No.4 does not comply with the eligibility criteria required and he has participated in the tender, which has been accepted by giving an acceptance letter, which is perverse, arbitrary and illegal and the same requires to be quashed. 3. Learned senior counsel further contends that there is a requirement for respondent No.4 to have a unit in scrapping yard in the State of Karnataka to perform any activities in accordance to the Policy, 2022 and Central Government Rules. Therefore, there is an illegal allotment of work order in favour of respondent No.4. He further contends that as per the Karnataka Scrapping Policy, 2022, the dismantling of any of the vehicle necessarily should be done in the registered Unit, which is required to be located in the State of Karnataka. He had also relied upon a judgement of the coordinate bench of this Court for obtaining an interim order in W.P.No.101237/2025 (GM- TEN), based on which, this Court granted an interim order in favour of the petitioners. Hence, learned counsel for petitioners seeks to quash the impugned order. 4.
He had also relied upon a judgement of the coordinate bench of this Court for obtaining an interim order in W.P.No.101237/2025 (GM- TEN), based on which, this Court granted an interim order in favour of the petitioners. Hence, learned counsel for petitioners seeks to quash the impugned order. 4. Per Contra, the learned counsel Sri Mohammad Akram Uppin representing respondent No.4 vehemently contends that the petition primarily is not maintainable for the reason that the petitioners are not participants in the tender and they are not at all affected or aggrieved by the order passed by the 3 rd respondent granting the letter of acceptance. However, if petitioners intend to challenge the notification, they will have to do so in accordance with law and not stall the tender process and the acceptance letter already issued, pursuant to which, delivery order also been issued to the 4 th respondent. Under the circumstances, he relies upon an order of a coordinate bench of this Court, which in similar circumstances in W.P.No.7376/2025 had initially granted an interim order, but later vacated the interim order at the instance of the successful bidder. The order reads as under : “Heard both sides. Learned counsel Sri P.D.Surana has filed I.A.no.3/2025 and has sought for vacating the order of stay. The primary contention raised by the petitioners is that most of the auction by KSRTC and BMTC is being conducted by respondent No.4 and respondent No.5 is the beneficiary, in light of certain Directors being part of both the Management. In the interim order passed on 12.03.2025, this Court had made certain observations including that respondents were restrained from confirming the auction till further orders. Sri P.D.Surana along with the statement fo objections has produced the details of bidders at Annexure-‘R8’. It is submitted that the valid bidders are detailed at Annexure-‘R8’ and does not find a mention of tender being awarded to respondent No.5. It is further submitted that the petitioner is not a participant in the tender process. Learned counsel Sri G.Lakshmeesh Rao appearing for respondent KSRTC has adopted the same line of arguments and has filed the statement of objections and along with the statement of objections, it is pointed out that the bids which are valid and under consideration are not that of respondent No.5. Learned counsel appearing for respondent No.4 has filed the statement of objections. Same is taken on record.
Learned counsel appearing for respondent No.4 has filed the statement of objections. Same is taken on record. In light of preliminary submissions made and undue hardship as pleaded by respondent Nos.2 and 3, it is deemed appropriate in light of the above to modify the interim order permitting respondent No.2 and 3 to proceed further to take a decision insofar as bids are concerned in terms of their tender notification and finalise it and proceed further. However, the learned Senior Counsel appearing on behalf of the petitioner has raised certain aspects that may still require hearing. The respondent to take their stand insofar as the allegations regarding mala fides and other grounds. List the matters for preliminary hearing in ‘B’ group on 14.07.2025.” 5. Therefore, respondent No.4 contends that when the petitioners have not participated in the tender, they would not have any right to challenge the letter of acceptance and the delivery order issued in favour of respondent No.4. They may be at liberty to do so by following due process of law in appropriate procedures. 6. Learned counsel Sri Prashant Hosmani appears for respondent No.2 submits that it is not in dispute that the interim order granted by the co-ordinate bench of this Court was vacated on the ground that the petitioner therein had not participated in the tender. 7. Having heard learned senior counsel for petitioners and learned counsel for respondents. The fact remains that respondent No.4 is a successful bidder, having been given the letter of acceptance and subsequently given the delivery order for performance of certain tender work. It is contended by learned counsel for the 4 th respondent that as per the rules, he will be coming within the purview of Section 6 and not Rule 5, therefore the applicability of Rule 5 could not affect respondent No.4 and he would be only governed under Rule 6 for scrapping of vehicles. It is also contended that when the petitioners are not participants, they would not be affected by the order of acceptance and delivery order. If at all petitioners are affected, they are at liberty to file an appropriate proceedings to challenge the violation of the scrapping policies of the State of Karnataka, 2022 and Rules of the Central Government. 8.
It is also contended that when the petitioners are not participants, they would not be affected by the order of acceptance and delivery order. If at all petitioners are affected, they are at liberty to file an appropriate proceedings to challenge the violation of the scrapping policies of the State of Karnataka, 2022 and Rules of the Central Government. 8. A co-ordinate bench of this Court in Writ Petition No.17266/2022 disposed of on 09.11.2022, considering the identical circumstance of non-participation of a tenderer, therein has held as follows : 11. A tenderer who remains outside and then seeks to question the tender process or conditions stipulated in the tender notification would not get locus to challenge and condition of tender. This issue need not detain this Court for long or delve deep into the matter. The Apex Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA (supra) considering this issue, has held as follows: “20. While considering the relief claimed by the respondent (claimant), the same should have been tested on the touchstone of the principle governing the tender process, especially when the validity of the tender document has not been put in issue or challenged before any competent forum. Going by the terms and conditions in the tender documents, as already alluded to in para 10 above, there is no title of doubt that the right of the claimant (respondent) to match the bid of L-1 or to exercise ROFR would come into play only if the respondent was to participate in the tender process pursuant to the notice inviting tenders from the interested parties. The objective of tender process is not only to adhere to a transparent mechanism but to encourage competition and give equal opportunity to all tenderers with the end result of getting a fair offer or value for money. The plain wording of the eligibility clause in the tender documents and the incidental stipulations make it explicit that the respondent was required to participate in the tender process by submitting its sealed bid (technical and financial).
The plain wording of the eligibility clause in the tender documents and the incidental stipulations make it explicit that the respondent was required to participate in the tender process by submitting its sealed bid (technical and financial). The fact that a deeming clause has been provided in the tender document that if the respondent was to participate in the bidding process, it shall be deemed to fulfill all the requirements of the tender Clauses 3 to 6 of RFP, being the existing concessionaire of the project, does not exempt the respondent from participating in the tender process; rather the tenor of the terms of the documents made it obligatory for the respondent to participate in the tender process to be considered as a responsive bidder, along with others. Having failed to participate in the tender process and, more so, despite the express terms in the tender documents, validity whereof has not been challenged, the respondent cannot be heard to contend that it had acquired any right whatsoever. Only the entities who participate in the tender process pursuant to a tender notice can be allowed to make grievances about the non-fulfillment or breach of any of the terms and conditions of the tender documents concerned. The respondent who chose to stay away from the tender process, cannot be heard to whittle down, in any manner, the rights of the eligible bidders who had participated in the tender process on the basis of the written and express terms and conditions. At the culmination of the tender process, if the respondent had not participated, in law, the offer submitted by the eligible bidders is required to be considered on the basis of the stated terms and conditions. Thus, if the claim of the respondent was to be strictly adjudged on the basis of the terms and conditions specified in the subject tender document, the respondent has no case whatsoever.” (Emphasis supplied) The Apex Court clearly holds that the tenderer who would chose to stay away from the tender process cannot be heard to whittle down the rights of eligible bidders who had participated in the tender process on the basis of written and express terms and conditions. At the culmination of the tender process, if the tenderer had not participated in law, he cannot be seen to question the terms and conditions.
At the culmination of the tender process, if the tenderer had not participated in law, he cannot be seen to question the terms and conditions. The petitioners, in the case at hand, have admitted their non participation in the tender. Staying away from the tender, they cannot now seek to challenge the tender. It is further germane to notice a similar view taken by the Calcutta High Court . A Division Bench of the High Court of Calcutta in the case of SUBIR GHOSH v. STATE OF WEST BENGAL AND OTHERS has held as follows: “4. The more important factor is that the tender process in this case opened sometime in March, 2019 and the closing date for submitting online bids was April 1, 2019. The writ petition was filed in January, 2020. Though it is submitted on behalf of the writ petitioner that the time to submit the bids was extended, no specific date in such regard is indicated. What is apparent is that the writ petitioner did not participate in the bidding process and yet chose to challenge the same. 5. It is possible that a prospective bidder finds the terms of the tender documents to be unfair or illegal and challenges the same; but such challenge has to be before the time to put in the bids is closed. At any rate, if a bid is made and the bid is thrown out on an illegal or unfair ground contained in the tender documents, even then, a challenge can be fashioned. But a person who has not participated in the bidding process at all cannot challenge the tender conditions on any ground whatsoever. This admitted aspect of the matter escaped the attention of the Single Bench while passing the impugned order of January 15, 2020. 6. For the reasons aforesaid, the order dated January 15, 2020 cannot be sustained and the same is set aside. Since the best arguable case of the writ petitioner will not result in any of the tender terms being altered as the writ petitioner did not participate in the process at all, the writ petition itself is dismissed.
6. For the reasons aforesaid, the order dated January 15, 2020 cannot be sustained and the same is set aside. Since the best arguable case of the writ petitioner will not result in any of the tender terms being altered as the writ petitioner did not participate in the process at all, the writ petition itself is dismissed. Nothing in this order will be construed to be an approval of the terms and conditions of the tender document and in an appropriate challenge, the same may be considered in accordance with law.” In the light of the judgments of the Apex Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA and the Division Bench of the Calcutta High Court in the case of SUBIR GHOSH holding that only a participant can question the tender, the challenge raised by the petitioners who are not the participants in the subject tender, would thus tumble down. Therefore, the second issue that fell for consideration which concerns locus of the petitioners to challenge the tender process being held against the petitioners, the first issue with regard to tender process would not arise for consideration, as it is trite law, that if a writ petitioner has no locus to raise a challenge to the subject matter, no other ground on merit of the challenge need be considered." 9. Subsequent to the afore-quoted Judgement, the Hon’ble Apex Court again in the case of Airport Authority of India vs. Centre for Aviation Policy, Safety and Research (CAPSR) and Others, reported in SCC online SC 1334, has held as follows : "7. Shri K.M. Nataraj, learned Additional Solicitor General of India appearing for AAI has assailed the impugned judgment and order passed by the High Court, inter alia, on the following grounds: i) that the original writ petitioner before the High Court has no locus standi to maintain the writ petition; ii) that the terms and conditions invitation to tender, being in the realm of contract, are not open to judicial scrutiny; and iii) MSME order of 2012 and MSME order of 2018 are not applicable in the facts of the present case (Emphasis supplied) 26.
At the outset, it is required to be noted that respondent No. 1 claiming to be a non-profit organisation carrying out research, advisory and advocacy in the field of civil aviation had filed a writ petition challenging the tender conditions in the respective RFPs. It is required to be noted that none of the GHAs who participated in the tender process and/or could have participated in the tender process have challenged the tender conditions. It is required to be noted that the writ petition before the High Court was not in the nature of Public Interest Litigation. In that view of the matter, it is not appreciable how respondent No. 1 original writ petitioner being an NGO would have any locus standi to maintain the writ petition challenging the tender conditions in the respective RFPs. Respondent No. 1 cannot be said to be an" aggrieved party". Therefore, in the present case, the High Court has erred in entertaining the writ petition at the instance of respondent No. 1, challenging the eligibility criteria/tender conditions mentioned in the respective RFPs. The High Court ought to have dismissed the writ petition on the ground of locus standi of respondent No. 1 original writ petitioner to maintain the writ petition. (Emphasis supplied) 27. Even otherwise, even on merits also, the High Court has erred in quashing and setting aside the eligibility criteria/tender conditions mentioned in the respective RFPS, while exercising the powers under Article 226 of the Constitution of India. As per the settled position of law, the terms and conditions of the Invitation to Tender are within the domain of the tenderer/tender making authority and are not open to judicial scrutiny, unless they are arbitrary, discriminatory or mala fide. As per the settled position of law, the terms of the Invitation to Tender are not open to judicial scrutiny, the same being in the realm of contract. The Government/tenderer/tender making authority must have a free hand in setting the terms of the tender." 10. Having perused the materials placed on record and the fact that the petitioners had not participated in the tender. I am in agreement with learned counsel for respondent No.4 that the petitioners will have to approach the appropriate authority or file a petition questioning the Rules and the allotments so made.
Having perused the materials placed on record and the fact that the petitioners had not participated in the tender. I am in agreement with learned counsel for respondent No.4 that the petitioners will have to approach the appropriate authority or file a petition questioning the Rules and the allotments so made. But the present order of tender, which is given to respondent No.4 cannot be interfered by a person who is not affected, who had not participated in the tender, more so, relying on an order of coordinate bench of this Court mentioned supra, the present petition could be disposed of. Accordingly, I pass the following : ORDER (i) Petition is dismissed as petitioners had not participated in the tender process. (ii) If at all the petitioners are aggrieved by the Rules, they are entitled to challenge the same in accordance with law. (iii) This Court has not delved into the merits of the matter as to the applicability of Rule 5 or Rule 6 to respondent No.4 and whether respondent No.4 is validly operating in the State of Karnataka. (iv) Ordered accordingly.