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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 21ST DAY OF JUNE 2012
BEFORE
THE HON’BLE MR.JUSTICE AJIT J GUNJAL
WRIT PETITION No.1310/2012(GM-TEN)
BETWEEN:
M/S SRI KRISHNA SHELTERS PVT LTD
REP. BY THE CHAIRMAN
AND MANAGING DIRECT
SRI K A RAGHAVENDRA
S/O LATE K N A RAO
AGED 48 YEARS, OFFICE AT NO.59,
"SRI KRISHNA SUDHA",
WEST ANJANEYA TEMPL
STREET OFF. BASAVANGUDI MAIN ROAD,
GANDHIBAZAAR
BANGALORE 4
... PETITIONER
(BY SRI.RAVI SHANKAR, ADVOCATE
FOR M/S LEX NEXUS)
AND
1.NATIONAL INSTITUTE OF UNANI MEDICINE (NIUM)
KOTTIGEPALYA MAGADI ROAD, BANGALORE.
REPRESENTED BY ITS DIRECTOR.
2.HSCC INDIA LTD.,
GOVT OF INDIA ENTERPRISE
HAVING ITS REGD./CORPORATE OFFICE
NO.E-6(A), SECTOR I
NOIDA U.P. 201301
2
REPRESENTED BY ITS GENERAL MANAGER.
3. M/S K M V PROJECTS LTD.,
AMENDED AS PER
NO.8-3-948/949, LEVEL 4,
SOLITAIRE PLAZA COURT ORDER 29.3.12
BESIDE IMAGE HOSPITAL, AMEERPET,
HYDERABAD-500 073,
ALSO AT NO.302, 3RD FLOOR, NO.7, EAST
PARK ROAD, KUMARA PARK EAST,
BANGALORE-20
REP. BY ITS DIRECTOR.
.. RESPONDENTS
(BY SRI : VISHNU BHAT ADVOCATE FOR R1 & R2,
SHRI DHYAN CHINNAPPA ADVOCATE FOR
M/S.BEST LAW PARTNERS, FOR R-3)
----THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA WITH A
PRAYER TO DIRECT THE RESPONDENTS TO CONSIDER
THE BID DOCUMENTS PRODUCED AS PER ANNEXURE C
DATED 9.11.2011. TO THE WRIT PETITION.
THIS
WRIT
PETITION
COMING
ON
FOR
PRELIMINARY HEARING ‘B’ GROUP THIS DAY, THE COURT
MADE THE FOLLOWING: -
ORDER
A notice inviting tender was published on 8.10.2011
with an estimated cost of the project at Rs.1250 lakhs.
Copy of the tender notification is at Annexure-A. The
petitioner along with others
was an aspirant. The
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petitioner
claims that it possesses qualification for
eligibility criteria for pre-qualification and submitted all
the necessary documents in compliance of Clause 3 in
proof of minimum eligibility criteria. The condition of
the tender was that average annual financial turnover
during the last three consecutive years should be at
30% of the estimated cost and
petitioner by
was demonstrated by
producing the required
balance sheets.
The petitioner submitted its tender document with all
other requirements such as solvency certificate and the
bidding capacity was also made available.
furnished the details of
equipment
capabilities
personnel
It had also
capabilities,
and financial capabilities.
Suffice it to say that during the scrutiny
of the pre-
qualification documents which was held on 09.11.2011,
it was noticed that the petitioner had not attested his
signature to Volume 6 of the document which was an
essential
submitting
ingredient
to
their
conditions
the tender document.
before
Under these
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circumstances, respondents 1 and 2 invoked Clause 21
of the Tender document and requested the petitioner to
counter sign Volume 6 of the tender document. It is the
case of the petitioner that the said
document was
counter signed and was sent to the tendering authority.
But however the tendering authority choose to reject the
tender of the petitioner on the ground
that at the
inception itself Volume 6 was not signed. According to
the petitioner, once the tendering authority exercises
Clause 21 of the tender document the bid of the
petitioner ought to have been considered with reference
to Clause 21 and the signature
has been put on the
Volume 6 and sent at a later point of time.
The tender
of the petitioner was rejected on 29.11.2011 though
specifically not by any communication but however by
returning the bank guarantee, the rejection of the said
tender is questioned by the petitioner before this Court.
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2.
Notice was issued to the respondents 1 and 2 and
they have entered appearance and have filed statement
of objections inter alia contending that as on the date
when the tender was opened and
qualification
was
being
the
considered,
pre-bid
necessary
information which was sought from the petitioner was
not forthcoming.
Hence, its tender was rejected
and
they justify their action with reference to various
correspondence inter se between them.
has filed
this writ petition
The petitioner
on 10.1.2012 seeking for
certain reliefs. But however during this interregnum,
the third respondent was
awarded the tender work.
Hence, on an application made by the petitioner,
the
third respondent is impleaded. On being notified of the
proceedings, the third respondent has also filed its
objections inter alia contending that the
bid of the
petitioner was rightly rejected, more so having regard to
Clause 15 and 21 of the tender document.
their contention
It is also
that after awarding of the contract,
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work order has been issued and work is substantially
in progress.
Hence at this point of time question of
considering the case of the petitioner does not arise
inasmuch as the rejection was just and proper,
having
regard to the fact that the query which was raised by
the tendering authority was not complied within a
specified time and even as on the date, when the prequalification bid was opened and was being considered,
query was not replied.
3.
In support of the petition, Mr.Ravishankar for the
petitioner places reliance on Clause 21 of the document
which according to him would come to his assistance.
He submits that
petitioner was
Volume 6
was not signed
and the
asked by the respondents 1 and 2 to
counter sign Volume 6. It appears according to him,
there were two more
tenderers
who were similarly
placed and accordingly were asked to counter sign. He
would assert that the said Volume 6 was signed and
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sent to respondents 1 and 2 by
reached them before bid
submits
courier and it had
was finalized. He
that the petitioner’s tender
further
could not have
been rejected solely on the premise that Volume 6 was
not signed. Mr.Ravishankar further submits
having given
to understand that
that
his bid would be
considered after obtaining the signature on Volume 6,
it would amount to legitimate expectation.
Hence,
rejection is bad.
4.
Mr.Bhat in support of the statement of objections
filed by respondents 1 and 2 justifies the rejection on
the ground that as on the date when the tender was
being considered Volume 6 signed by the petitioner was
not received by them.
In
the circumstances, since
tender conditions were not complied
their rights in rejecting the tender.
they were within
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5.
Mr.Dhyan
Chinnappa,
learned
Counsel
appearing for the respondent no.3 reiterated what is
stated in the statement of objections and submits that
the petitioner
though was the lowest bidder was not
eligible at all for consideration since he had not
complied with the tender formalities inasmuch as
Volume 6 was not signed.
He further submits
that
though it was open for the respondents to outrightly
reject the said tender nevertheless they
choose to
exercise Clause 21 and requested the petitioner to sign
Volume 6
and submit Volume 6 after the signature.
That having not been done, rejection is justified. He
further submits that
third respondent
has expended
substantial amount and the work is in progress. At this
point of time,
if the tender
which is
awarded to
respondent no.3 is set aside, it would put the onus on
respondent no.3 as well as the Exchequer inasmuch as
the entire process is required to start all over again,
with reference to other bidders also.
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6.
Indeed insofar as the intervention of the Courts
under Article 226 of the Constitution of India
with
reference to the tender has been set at rest by the Apex
Court in the various decisions.
The Apex Court in
many number of judicial pronouncements has observed
that the Courts should be slow in stepping in and
upsetting the tender process unless it is found that it is
accentuated by mala fides or rejection of the tender is
on an unreasonable
premise or a ground. The fact
that the tender of a tenderee is rejected and if he is
lowest bidder does not necessarily entitle it to consider
if other things are equal.
7.
In
the
case
on
hand
apparently
the
communication was issued by the respondents 1 and 2
on 15.11.2011 which would read as under:
“With reference to your offer No.nil dated
8thNovember 2011 submitted by you on
09.11.2011 for the subject works. Your are
requested
to
submit
the
following
clarifications/details.
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1.Audited Balance Sheet for FY-2005-06
and FY-2006-07.
2.Membership No. of CA.206099
3.Bidding Capacity details duly certified by
CA 7 notarized. Chartered A/C.
4.Biodataof
key officials as per clause
no.3.3 of Vol-I.
5.Registration/Undertaking for labour cess
registration as perclauseno.4.1 of Vol-I
6.Volume-VI
of
Tender
document(comprising of tender drawing)
duly signed is not submitted by you.
You are requested to submit the above
clarification
by
21.11.2011
through
courier/speed post/by hand/fax”.
Indeed the said communication is issued on the basis
of tender document clause 21.1.
Indeed it is to be
noticed that a clarification was sought for in respect of
information
already
submitted
by
bidders,
the
clarification of bids from bidders vide HSCC letter dated
15.11.2011.
During the opening of pre-qualification
applications, it was
found
that M/s.Sri Krishna
Shelters, that is the petitioner and another Company
had not submitted Volume 6
drawing bids.
comprising of tender
The bids were thereafter
sent
to
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Evaluation
Committee.
Under
this
circumstance,
necessary information was sought. It is significant to
note
that
the
petitioner
responded
communication dated 15.11.2011
to
the
immediately on
18.11.2011 which would read as under:
“Following
documents
are
forwarded
herewith for your further necessary action
please:
1) Audited Balance Sheet for FY 2005-06
and 2006-07.
2)Membership Number of CA 206099.
3)Bidding capacity details duly certified by
CA and notarized.
4) Biodata of Key officials as per clause
No:303 of Vol.-I.
5)Undertaking for Labour cess registration
as per clause No.4.1 of Vol.-I.
It is submitted that the Vol.VI of Tender
documents (comprising of tender drawings)
forwarded was not signed due to over sight.
However, it is confirmed that all our rates
quoted for each items are based on tender
drawings(Vol.IV tender documents) and
specification in the BOQ, we accept in case
if there in any variations.”
However, it is significant to note that Volume 6 of the
tender document comprising of the tender documents
was not signed. But however they would reiterate that
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the
rates quoted for each items are based on tender
drawing and they accept if there are any variations. It
would necessarily mean that the
tender documents was not
Volume no.6 of the
sent along with the
communication dated 18.11.2011.
Indeed the said
document was sent on 28.11.2011 signed by the
Managing Director for necessary action. Apparently by
the time the document reached the respondents,
Committee had
finalised
the
the tender in favour of the
third respondent and work order was issued on
6.2.2012.
It is also to be noticed that the bank
guarantee
which was furnished by the petitioner was
returned on 28.12.2011 and it was open for the
petitioner to take shelter under Clause 21 of the tender
documents.
Before considering
Clause 21 of the
tender document, it is necessary to look into Clause 15
of
the
tender
document
which
is
in
respect
submission of bid. 15.1 would read as under:
of
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“The bid shall be submitted in accordance
with the
procedure detailed herein.
Specified document shall be enclosed in an
envelope of appropriate size which shall be
sealed
(i) Envelope No.1 Shall contain the
Bid
securities as mentioned in Clause 12 of the
Instructions to the bidders.
(ii) Envelope-II shall contain covering letter
and offer bid documents Volume I, II, III, IV
and VI duly signed and stamped with
necessary documents as described in the
pre-qualification
document including the
following. Bids containing any conditions are
liable to be rejected”.
Clause 15 also details as to the documents which are
required to be sent along with the tender document. It is
significant to note that the petitioner did not send as
many as five documents along with the Volume 6 of the
tender document not duly signed by it.
respondents 1 and 2
Indeed the
sought for clarification under
Clause 21. Clause 21 is in respect of
clarification of
bids. Clause 21.1 would speak about the assistance in
examination, evaluation and comparison of bids.
The
Engineer may ask bidders individually for clarification
of their bids including the break down of
unit prices.
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A request for clarification and response
writing in reply or fax,
shall be in
no change in the substance
shall be sought. Indeed having regard to the Clause
21 necessary information was sought. If the necessary
information was supplied on or before 21.11.2011, as
sought for by the respondents 1 and 2,
tender or the bid of the petitioner
considered.
probably the
could have been
The rejection of tender of the petitioner is
on the premise that
even on a subsequent extended
date, Volume 6 duly signed was not sent to the
competent authority for consideration. Indeed this
would amount to not specifying the tender conditions
as per the tender documents.
8.
It is no doubt true that Clause 19.6 was pressed
into service to indicate that if the conditions of the
tender are not specified,
it is not
imminent that it
should be rejected but however that by itself cannot be
said that it is not within the powers of the tendering
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authority to reject the bid
if bidder has not complied
with the conditions of the tender document.
9.
Insofar as the legitimate expectation is concerned,
the Apex Court has observed in the case of PUNJAB
COMMUNICATONS LIMITED VS. UNION OF INDIA AND
OTHERS reported in (1999) 4 SCC 727 as under:
“27.The basic principles in this branch
relating to “legitimate expectation” were
enunciated by Lord Diplock in Council of
Civil Service Unions v.Minister for the Civil
Service at pp.408-409. It was observed in
that case that for a legitimate expectation to
arise, the decisions of the administrative
authority must affect the person by
depriving him of some benefit or advantage
which either
(i) he had in the past been permitted by the
decision-maker to enjoy and which he can
legitimately expect to be permitted to
continue to do until there has been
communicated to him some rational
grounds for withdrawing it on which he has
been given an opportunity to comment;
or
(ii) he has received assurance from
decision-maker
that they will not
withdrawn
without giving him first
opportunity of advancing reasons
the
be
an
for
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contending that
withdrawn”.
The Apex
OF
they
should
not
be
Court in the case of FOOD CORPORATION
INDIA
1993(1)
SCC
71
and
NAVAJYOTHI
CO.OPERATIVE HOUSING SOCIETY 1992(4) SCC 477
has observed that the legitimate expectation is not the
same thing as anticipation. It is also different from a
mere
wish or desire or a hope. Nor is it a
claim or
demand based on a right. A mere disappointment would
not give rise to
legal consequences.
The Apex Court
has observed thus:
“The legitimacy of an expectation can be
inferred only if it is founded on the sanction
of law or
custom
or an established
procedure followed in regular and natural
sequence.
…..Such expectation should be
justifiably legitimate and protectable”.
The
Apex
Court
in
the
case
of
PUNJAB
COMMUNICATON has quoted thus from the case of R.
VS. SECRETARY
under:
OF STATE
FOR TRANSPORT as
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“ The Court is not the Judge of the merits of
the decision-maker’s policy. …the public
authority in question is the Judge of the
issue whether ‘overriding public interest’
justifies such a change in policy….But that
is no more than saying that a change in
policy, like any discretionary decision by a
public authority, must not transgress
Wednesbury principles”.
Ultimately, the Apex Court was of the view that
the
appellant therein was not able to establish that he was
entitled for the benefit under the Doctrine of Legitimate
Expectation. I am of the view that no different view can
be taken in the present set of circumstances.
10.
The Courts interference in a case of tender has
been set at rest as observed by various decisions of the
Apex Court.
To quote a few in AIR INDIA LIMITED
VS.COCHIN
INTERNATIONAL AIRPORT LIMITED
(2000) 1 SCR 1505 at 18.4 has observed thus:
“The award of a contract, whether it is by a
private party or by a public body or the
State,
is
essentially
a
commercial
transaction. In arriving at a
commercial
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decision
considerations
which
are
paramount are commercial considerations.
The State can choose its own method to
arrive at a decision. It can fix its own terms
of invitation to tender and that is not open to
judicial
scrutiny.
It can enter into
negotiations before finally deciding to accept
one of the offers made to it. Price need not
always be the sole criterion for awarding a
contract. It is free to grant any relaxation,
for
bona fide reasons,
if the tender
conditions permit such a relaxation, for bona
fide reasons, if the tender conditions permit
such a relaxation”.
The
Apex
Court
in
the
case
of
RAUNAQ
INTERNATIONAL LIMITED VS. IVR CONSTRUCTIONS
LIMITED reported in AIR 1999 SC 393 observed thus:
“When a writ petition is filed in the High
Court challenging the award of a contract by
a public authority or he State, the Court
must be satisfied that there is some element
of public interest involved in entertaining
such a petition. If, for example, the dispute
if purely between two tenderers, the Court
must be very careful to see if there is any
element of public interest involved in the
litigation. A mere difference in the prices
offered by the two tenderers may or may not
be decisive in deciding whether any public
interest is involved in intervening in such a
commercial transaction. It is important to
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bear in mind that by Court intervention, the
proposed
project may be
considerably
delayed thus escalating the cost far more
than any saving which the Court would
ultimately effect in public money by deciding
the dispute in favour of one tenderer or the
other tenderer. Therefore, unless the Court
is satisfied that there is a substantial
amount of public interest, or the transaction
is entered into mala fide, the Court should
not intervene under Article 226 in disputes
between two rival tenderers”.
Having said so, I am of the view that it is not open at
this point of time for the petitioner to question the
tender process. Indeed it is also to be noticed that the
petitioner
cannot
cry
respondents 1 and 2
foul
with
the
of
as its tender could have been
rejected at the inception itself.
But however by
exercising Clause 21 had extended time
clarification.
action
That not having been
to submit the
done and the
clarification not having reached the respondents 1 and
2 in time, I
am of the view that there is a very little
scope to interfere with the tender process. It is also to
be noticed that no material is forthcoming to show that
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at a later point of time before the bid was finalised
required clarification bid left unattended in the first
instance was sent. In the absence
of any material, it
cannot be said that the Volume 6 was signed and sent.
Having said so,
I am of the view that question of
interference does not arise.
Writ petition stands
rejected.
SD/JUDGE
sh