M/S Sapl Gcc Jv vs Government Of India
2022 Latest Caselaw 3104 Kant

                         1

  IN THE HIGH COURT OF KARNATAKA, BENGALURU
                                                       R
   DATED THIS THE 23RD DAY OF FEBRUARY, 2022

                      BEFORE

       THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT

       WRIT PETITION NO.11165 OF 2021(GM-TEN)

BETWEEN:

M/S SAPL-GCC JV,
FLAT NO.302, MAHARAJA HEIGHTS,
ATTAVARA, FALNIR ROAD,
MANGALORE - 575 001.
REPRESENTED BY ITS PA HOLDER,
SRI. D V RAMAN.
                                        ... PETITIONER
(BY SRI. S S NAGANAND, SENIOR COUNSEL AND
    SRI. BASAVARAJ V SABARAD, SENIOR COUNSEL A/W
    SRI. H L PRADEEP KUMAR, ADVOCATE)

AND:

1. GOVERNMENT OF INDIA,
   MINSTRY OF PORTS,
   SHIPPING AND WATERWAYS TRANSPORT,
   BHAWAN1 PARLIAMENT STREET,
   NEW DELHI - 110 001.
   REPRESENTED BY ITS SECRETARY.

2. NEW MANGALORE PORT TRUST,
   GOVERNMENT OF INDIA,
   MINSTRY OF PORTS,
   SHIPPING AND RAILWAYS PANAMBURU,
   MANGALURU - 575 010.
   REPRESENTED BY ITS CHAIRMAN.

3. NEW MANGALORE PORT TRUST,
   THE CHIEF ENGINEER (CIVIL)
   GOVERNMENT OF INDIA,
   MINSTRY OF PORTS,
   SHIPPING AND RAILWAYS PANAMBURU,
   MANGALURU - 575 010.
                                2

4. NEW MANGALORE PORT TRUST,
   TENDER COMMITTEE
   GOVERNMENT OF INDIA,
   MINISTRY OF PORTS,
   SHIPPING AND RAILWAYS
   PANAMBURU MANGALURU - 575 010

5. M/S YOJAKA INDIA PRIVATE LIMITED,
   A PRIVATE LIMITED COMPANY
   INCORPORATED UNDER INDIAN
   COMPANIES ACT,
   HAVING ITS REGISTERED OFFICE AT
   D.NO.3-28/43, 2ND FLOOR,
   ABCO TRADE CENTRE, NH17,
   KOTTARA CHOWKI, MANGALORE.
   DAKSHINA KANNADA - 575 006.
   REPRESENTED BY ITS MANAGING DIRECTOR
   SRI. JAGADISH BOLOORU.
                                      ... RESPONDENTS
(BY SRI. R YATEESH KUMAR, CGC FOR R1;
    SRI. R SUBRAMANYA, ADVOCATE FOR R2 TO R4;
    SRI. ANAND R KALLI, FOR
    SRI. M S VENUGOPAL, ADVOCATE FOR R5)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
REVIEW AND RECALL THE ORDER PASSED ON 19.04.2021 IN
W.P.NO.6892/2021(GM-TEN) HEAR THE PEITIONER AND
DISMISS THE WRIT PETITION NO.6892/2021(GM-TEN) FILED
BY R5 M/S YOJAKA INDIA PRIVATE LIMITED ANNEXURE-M
AND ETC.,

    THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDER, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:

                         ORDER

Petitioner-Company who was in the fray of public

tender in question is knocking at the doors of Writ Court

seeking review of the judgment rendered by a Co-ordinate

Bench of this court in fifth respondent's

W.P.No.6892/2021 disposed off on 19.4.2021 inter alia on

the grounds that it was not arrayed as a party to the case

and the said judgment has prejudiced its interest; in

support of the claim for review, the decision of the Apex

Court in SHIVDEO SINGH VS STATE OF PUNJAB AIR

1963 SC 365, is pressed into service.

2. FACTS IN BRIEF:

(a) The NMPT had called for a re-tender for the

construction of breakwater, marine structure, dredging &

reclamation for fishing harbour at Kulai on EPC basis

pursuant to the NMPT Board Resolution No.113/2019-20

dated 25.11.2019. This tender was in e-procurement

mode through CPP Portal in two cover system. Four

persons including the petitioner were in the fray. The bids

were opened on 23.02.2020 and petitioner & another

bidder were found to be technically qualified whereas the

bid of other two was rejected. However, the tender was

cancelled since the rate quoted by L-1 bidder was 40%

above the estimated cost of the project.

(b) The NMPT vide Board Resolution No.141/2021

dated 10.12.2020 again called for e-tender again adding

some more works to the project. The last date for

submission of e-tender was 01.02.2021 and the date for

opening of the tender was 20.02.2021. Four persons were

in the tender fray, including the petitioner & the 5th

respondent. Petitioner ultimately was found to be the

lowest bidder. However the bid of 5th respondent came to

be rejected. This was pursuant to Board Resolution which

accepted Tender Committee Recommendations dated

30.03.2021 to open the price bids of qualified bidders and

to disqualify the 5th respondent & another.

(c) The 5th respondent had filed a complaint dated

02.04.2021 with the Central Government and others

alleging some irregularities perpetrated in the subject

tender process by the officials of the NMPT hand in glove

with petitioner. A day before, he had also filed W.P.

6892/2021 essentially laying a challenge to TCE

recommendation and the award of tender work; however,

petitioner was not made a party thereto. The Central

Government vide order dated 15.04.2021 had constituted a

Committee to conduct a detail investigation in the matter

and to report. In view of this development, the said Writ

Petition came to be disposed off by a Co-ordinate Bench of

this Court on 19.04.2021 on the submission of the NMPT

that further action with regard to tender in question would

be taken only "after the Central Government would pass

the order on the basis of report of the enquiry committee".

(d) Petitioner, who as already mentioned above,

was not a party to the said Writ Petition has filed this

petition seeking review of the said judgment relying on the

decision of the Apex Court in SHIVDEO SINGH, supra. In

substance, petitioner submits that the tender process

having already been accomplished, the Central Govt. could

not have directed enquiry at the instance of respondent

no.5 and could not have asked the NMPT to go for a fresh

tender, there being absolutely no justification therefor.

Even otherwise, Central Govt. does not have jurisdiction in

the matter and that the fifth respondent neither had locus

standi nor had he made out any case for the intervention

of Central Govt.

3. After service of notice, the first respondent

Central Government has entered appearance through the

learned CGC. The respondent nos. 2, 3 & 4 being the New

Mangalore Port Trust [hereinafter 'NMPT'], are represented

by their Senior Panel Counsel. A private advocate appears

for the 5th respondent who was the petitioner in the

aforesaid W.P.No.6892/2021. The Port Trust and the 5th

respondent have filed their Statements of Objections

separately. The respondent nos.1 & 5 resist the Writ

Petition making submission in justification of the judgment

in review. However, the NMPT broadly sails with the

petitioner.

4. Having heard the learned counsel for the

parties and having perused the Petition Papers, this Court

is inclined to grant indulgence in the matter as under and

for the following reasons:

(a) The tender in question was called on

21.12.2020. Pre-bid meeting was held on 11.1.2021. Last

date for submission of bids was extended up to 22.2.2021.

Petitioner had made the bid on the last day. The fifth

respondent & two other contractors were also in the fray.

Technical bids were opened on 23.2.2021 and the Project

Management Consultant ('PMC' for short) i.e., M/s L & T

Infrastructure Engineering Limited had submitted the

report recommending the bid of the petitioner and for the

rejection of fifth respondent's bid. The Tender Evaluation

Committee ('TEC' for short) in its meetings held on

25.3.2021 & 30.3.2021 found technical bid of the fifth

respondent as non-responsive and that of the petitioner as

responsive and therefore recommended to the Board of the

NMPT for consideration accordingly. The Board accepted

the said recommendation.

(b) Fifth respondent had filed W.P.No.6892/2021

on 1.4.2021 challenging TEC recommendation dated

25.3.2021 and decision thereon. Strangely, petitioner was

not arrayed as one of the respondents and that no

explanation is offered in the Statement of Objections as to

why it was not so arrayed. True it is that complaint was

filed on 2.4.2021 i.e., a day after instituting the Writ

Petition. Nothing prevented the said respondent from

impleading the petitioner herein as a respondent in all

fairness at least after the complaint was made. This

petitioner had filed a caveat on 3.4.2021 after sending

RPAD notice to him. Apparently, petitioner happened to

be a proper party if not a necessary party to the said Writ

Petition vide RAZIA BEGUM VS. SAHEBZADI ANWAR

BEGUM, AIR 1958 SC 886. The very nature and scope of

the works comprised in the tender in question apparently

show the urgency & importance. Thus, there was a kind of

sharp & unscrupulous practice adopted by the fifth

respondent in obtaining the judgment now in review,

keeping both the Co-ordinate Bench and the petitioner in

darkness. Such a person who had approached the court

with soiled hands cannot be permitted to resist this Writ

Petition on merits. An argument to the contrary would

amount to placing premium on the culpable conduct of a

litigant who happened to be a rival business competitor

and who had caused interdiction of implementation of the

public project resulting into heavy cost escalation and

enormous public inconvenience.

(c) As already mentioned above, the PMC in its

report dated 25.3.2021 had recommended to qualify the

bid of petitioner & another, and not to technically qualify

that of the fifth respondent & another. The TEC met on

25.3.2021 and held detailed deliberation which culminated

into the decision to accept the recommendation of PMC

and to open their bids. Since the project was time bound,

the recommendations of TEC were placed before the NMPT

Board on fast track basis on 29.3.2021 itself, for approval.

The Board in its resolution dated 31.3.2021 accorded

approval to the recommendation and authorized the NMPT

Chairman to accept the tender of petitioner (L1 bid). The

fifth respondent had lodged the complaint with the Minster

of State (I/C), Ministry of Ports, Shipping and Waterways,

New Delhi on 2.4.2021. The Central Govt. could not have

constituted a Committee to look into the said complaint

after the L1 bid of the petitioner was accepted especially

when the allegations in the complaint were more in the

nature of procedural irregularities not going to the root of

the matter; that was the stand of NMPT before the Central

Govt. too, as here.

(d) There is no justification for the Central Govt. to

constitute a Committee to enquire into alleged

irregularities in the tender process on the baseless

allegations of a loosing bidder whose offer after scrutiny

was found to be substantively defective inter alia on the

grounds that: the consortium members ought to have

collectively authorized their lead member whereas only JV

member was authorized to be the lead member of the

consortium. The role of lead member was indicated as

'technical support' only and that of JV member indicated

'financial support and full execution of work'; thus there

was noticeable variance; there was ongoing NCLT case

against the fifth respondent. Petitioner points out that

there was a huge loan recovery proceedings against this

respondent and a Division Bench of this Court in

W.A.No.328/2020 disposed off on 6.4.2021 reserved

liberty to the appellant Corporation Bank to proceed

against the said respondent under the SARFAESI Act,

2002 for the recovery of loan approximately quantified at

Rs.275 crore. Several other defects also have been pointed

out in the bid of this respondent by the PMC and by the

TEC. It hardly needs to be stated that in awarding tenders

of gigantic value, several factors enter the fray of decision

making and such decisions cannot be readily upset by the

Central Govt. on some baseless allegations of an

unsuccessful business competitor leveled against a

successful bidder; be that as it may.

(e) Learned Senior Advocate, Mr.Naganand

appearing for the petitioner is more than justified in

arguing that the text of Section 111 of Major Port Trusts

Act, 1963 which empowers the Central Govt. to issue

direction does not come to the rescue of respondent -

Central Government inasmuch as such directions can be

issued only on questions of policy and not in specific

cases. Section 111 of the Act reads as under:

"111. Power of Central Government to issue directions to Board ((1) Without prejudice to the foregoing provisions of this Chapter, the Authority and every Board shall, in the discharge of its functions under this Act be bound by such directions on questions of policy as the Central Government may give in writing from time to time:

Provided that the Authority or the Board, as the case may be, shall be given opportunity to

express its views before any direction is given under this sub-section.

(2) The decision of the Central Government whether a question is one or policy or not shall be final."

He is right in submitting that policy as contemplated

under the above provision means general directions for

future guidance or regulation on repetitive basis, as of

norm applicable to all matters like Dredging Policy, Tariff

Policy, etc. and thus they are normative in character which

do not get exhausted on their application to a given fact

matrix.

(f) What The Oxford Handbook of Public Policy

(2008) authored by Robert E. Goodin, Martin Rein

& Michael Moran states at page 17 about 'policy' is

instructive:

"To do something 'as a matter of policy' is to do it as a general rule. That is the distinction between 'policy' and 'administration' (Wilson 1887), between 'legislating' policy and 'executing' it (Locke 1690). Policy makers of the most ambitious sort aspire to 'make policy' in that general rule‐setting way, envisioning administrators applying those general rules to particular cases in a minimally discretionary fashion (Calvert, McCubbins, and Weingast 1989)".

The directions/decisions of an authority that are individual

centric and case specific are not considered as matters of

policy. It is so even when the authority issuing the

direction has power to evolve the policy. There is

difference between what is policy and what is

administration/operation of policy. True policy decisions

ordinarily are dictated by the pragmatic considerations

such as financial, technical & social factors or constraints.

The operational area is concerned with the practical

implementation of or carrying out policies that are already

formulated. Operational decisions are usually made on the

basis of administrative discretion, expert opinion, technical

standards and other general standards of reasonableness.

This view is supported by the decision of Canadian

Supreme Court in BROWN VS. BRITISH COLUMBIA

(MINISTER OF TRANSPORTATION AND HIGHWAYS)

(1994) 3 LRC 581. This apart, under the text of this

provision, evolving of policy cannot be done without

hearing the Port Trust concerned. An exercise of a

statutory power in breach of express or implied conditions

will be illegal, the condition of hearing being mandatory

vide HARIDWAR SINGH vs. BEGUM SUMBRUI, (1973) 3

SCC 889. Obviously, the matter did not involve any

question of policy and therefore, the provision of section

111 of the Act could not have been invoked.

In the above circumstances, this Writ Petition

succeeds. The order in fifth respondent's

W.P.No.6892/2021 (GM-TEN) has been reviewed and

recalled and the said Writ Petition is dismissed. A Writ of

Certiorari issues quashing the order dated 15.4.2021 and

7.10.2021 issued by the first respondent-Central Govt. at

Annexures-L & Q respectively. A Writ of Mandamus issues

directing respondent nos.2 to 4 to consider awarding of the

contract in question to the petitioner, in accordance with

law and without brooking any delay.

Costs made easy.

This court places on record its deep appreciation for

the able assistance rendered by the Law Clerk cum

Research Assistant, Mr.Faiz Afsar Sait.

Sd/-

JUDGE

Snb/