Karnataka High Court

H.N.Pruthivinarayan vs The Managing Director on 4 October, 2023

Bench: Krishna S.Dixit

                             1

  IN THE HIGH COURT OF KARNATAKA, BENGALURU
                                                         R
                       TH
    DATED THIS THE 4        DAY OF OCTOBER, 2023

                       BEFORE

       THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT

  WRIT PETITION NO.2940 OF 2023 (GM-TEN)
BETWEEN:

H.N.PRUTHIVINARAYAN,
S/O H G NARAYANA,
AGED ABOUT 52 YEARS,
NO 65/14, P. B. NO. 32,
B M ROAD, HASSAN 573 201.
                                         ...PETITIONER
(BY SMT.LAKSHMY IYENGAR.,SENIOR COUNSEL A/W
    SRI. VENKATARAMANA K S., ADVOCATE)

AND:

1. THE MANAGING DIRECTOR,
   KSRTC, CENTRAL OFFICER,
   SHANTHINAGARA,
   BENGALURU 560 027.

2. THE DIVISONAL CONTROLLER,
   KSRTC, HASSAN DIVISION,
   HASSAN 573 201.
                                       ...RESPONDENTS
(BY SRI.P D SURANA., ADVOCATE)

     THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
QUASHING THE IMPUGNED E-TENDER NOTIFICATION DATED
10/01/2023     IN    NO.KARASA.HAVI.SAM.VAA/1868/22-23
ISSUED BY R-2 VIDE ANNEXURE-G AND DIRECTING THE
RESPONDENTS TO CONSIDER THE REPRESENTATIONS DATED
18/11/2022, 18/01/2023 VIDE ANNEXURE-F AND F1.

     THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDER, THIS DAY, THE COURT PRONOUNCED THE
FOLLOWING:
                                         2

                                    ORDER

Petitioner, claiming to be an ongoing contractor, is

tapping the writ jurisdiction of this Court for assailing the

Notification dated 10.01.2023 issued by the 2nd

respondent at Annexure-G calling for e-Tender inter alia in

respect of commercial complexes in the KSRTC bus stand

at Hassan. The habendum of the said tender in colloquial

reads as under:

"E-mÉAqÀgï ¥ÀæPÀluÉ ¸ÀASÉå-06/2022-23 ******* PÀ£ÁðlPÀ gÁdå gÀ¸ÉÛ ¸ÁjUÉ ¤UÀªÀÄ ºÁ¸À£À «¨sÁUÀzÀ ªÁå¦ÛUÉ ¸ÉÃjzÀ ºÁ¸À£À PÉÃA¢æAiÀÄ §¸ï ¤¯ÁÝtzÀ°è ¥Àæ¸ÀÄÛvÀ EgÀÄªÀ KPÉÊPÀ ¥ÀgÀªÁ£ÀVzÁgÀgÀ ¥ÀgÀªÁ£ÀV CªÀ¢üAiÀÄÄ ¢:31.03.2023 PÉÌ PÉÆ£ÉUÉÆ¼ÀÄîwÛgÀªÀÅzÀjAzÀ ¢:01.04.2023 jAzÀ C£ÀéAiÀÄªÁUÀÄªÀAvÉ ºÁ¸À£À PÉÃA¢æAiÀÄ §¸ï ¤¯ÁÝtzÀ°ègÀÄªÀ PÀnÖzÀ/ vÉgÀzÀ ¸ÀÜ¼ÀzÀ ªÁtÂdå ªÀÄ½UÉ, ¢éZÀPÀæ/£Á®ÄÌ ZÀPÀæ ¥ÁQðAUïUÀ½UÉ, 03, 05, 10 ªÀµÀðzÀ CªÀ¢üUÉ ¥ÀgÀªÁ£ÀVAiÀÄ DzsÁgÀzÀ ªÀÄqsÀ¯É (¥Àæw ªÀµÀð 10% gÀµÄÀ Ö ¥ÀgÀªÁ£ÀV ±ÀÄ®ÌzÀ ºÀÄZÀÑ¼ÀzÉÆA¢UÉ) ¥ÀgÀªÁ£ÀVzÁgÀgÀ£ÄÀ ß DAiÉÄÌ ªÀiÁqÀ®Ä E-mÉAqÀgï ¥ÀæQæAiÉÄAiÀÄ ªÀÄÆ®PÀ C¸ÀPÀÛjAzÀ CfðUÀ¼À£À£ÀÄ DºÁé¤¸À¯ÁVgÀÄvÀÛzÉ. EZÉÑAiÀÄÄ¼ÀîªÀgÀÄ ¸ÀA§A¢ü¹zÀ ªÀÄ½UÉUÀ¼À ªÀÄÄAzÉ ¸ÀÆa¹gÀÄªÀ E.JA.r. ªÉÆÃvÀªÀ£ÀÄß rr ªÀÄÆ®PÀ "Divisional Controller KSRTC Hassan Division" ºÉ¸Àj£À°è ¥ÁªÀw¸ÀÄªÀÅzÀÄ. ¥ÀæPl À uÉUÀ¼À£ÄÀ ß https://eproc.karnataka.gov.in & ksrtc.karnataka.gov.in DAvÀgïeÁ®zÀ ªÀÄÆ®PÀ qË£ï¯ÉÆÃqï ªÀiÁrPÉÆ¼Àî§ºÀÄzÀÄ."

2. Learned Senior Advocate appearing for the

Petitioner seeks to falter the tender in question on the

ground of force majeure namely COVID-19 Pandemic; the

two Central Government Notifications dated 19.02.2020 &

13.05.2020 have the effect of elongating the twelve year

contract period pro tanto; there is lapse on the part of

respondents in discharging certain contractual obligations

briefly stated in para 5 of the petition, despite

representations; Petitioner had filed a few cases such as

W.P.No.30258/2018, C.M.P No.233/2018,

W.P.No.8992/2021, W.P.No.16705/2022 (respondents

W.A.No.27/2023); bifurcation of subject matter of tender

is unsustainable; impugned action defeats legitimate

expectation; Petitioner has got right of extension of the

contract; there being an ongoing arbitration, without its

culmination into an award, the impugned tender could not

have been flouted. The counsel relied upon certain Rulings

in support of these submissions.

3. Learned Panel Counsel appearing for the

Respondents resisted the Writ Petition repelling the

submission made on behalf of the Petitioner. The

Statement of Objections have been filed on 14.03.2023

opposing the Writ Petition; the allegations of non-

performance of contractual obligations are denied; petition

is misconceived, an arbitrator having been appointed;

Petitioner's submission transcends the parameters fixed by

the Apex Court in the CAs referred to infra; Petitioner has

committed breach of contract and in any way the contract

has come to an end by efflux of time; respondents being

the owners of the premises in question have a greater

leverage in awarding contracts and the arguable split of

the items cannot be found fault with; Article 39(b) & (c) of

the Constitution would support such a split; matter having

ultimately gone in C.A.Nos.3625 and 3623-3624/2023, the

observations made by the Apex Court in its order dated

8.5.2023 are pressed into service. The Panel Counsel cited

certain Rulings in support of his contentions.

4. Having heard the learned counsel for the

parties and having perused the Petition papers, this court

grants partial indulgence in the matter for the following

reasons:

(a) Petitioner has been operating the contract in

question and its twelve year tenure was from 1.2.2011 to

31.1.2023 are not in dispute, the same being a matter of

record. The first submission of learned Sr. Advocate

appearing for the Petitioner that the tenure of the contract

should be elongated by the COVID-19 Pandemic period in

the light of two Central Government Notifications dated

19.2.2020 & 13.5.2020 has some force. During the

pandemic, almost all commercial activities had come to a

standstill world over, cannot be much disputed. That is

how, the said Notifications came to be issued. Even the

Apex Court in suo moto proceedings, extended the periods

of limitation in suo moto W.P.No.(c) 3/2020 in re:

cognizance for extension of limitation vide Misc.

Application No.665/2021 and Misc. Application

No.21/2022, because of unprecedented situation

generated by the COVID-19 Pandemic. This extension was

from 15.3.2020 to 28.2.2022. Arithmetically this period is

two years minus fifteen days. If this period is added to the

prescribed tenure of the contract between the parties, the

same would stand extended till 16.1.2025 and half of the

said period is reckoned, that would come to 9.1.2024. If

that be so, the impugned e-tender could not have been

issued.

(b) Let me examine the very concept of force

majeure. McCardie J. in Lebeaupin v. Crispin ([1920] 2

K.B. 714), has given an account of what is meant by

"force majeure" with reference to its history:

"...The expression "force majeure" is not a mere French version of the Latin expression "vis major". It is undoubtedly a term of wider import. Difficulties have arisen in the past as to what could legitimately be included in "force majeure". Judges have agreed that strikes, breakdown of machinery, which, though normally not included in "vis major" are included in "force majeure". An analysis of rulings on the subject into which it is not necessary in this case to go, shows that where reference is made to "force majeure", the intention is to save the performing party from the consequences of anything over which he has no control. This is the widest meaning that can be given to "force majeure", and even if this be the meaning, it is obvious that the condition about "force majeure" in the agreement was not vague. The use of the word "usual" makes all the difference, and the meaning of the condition may be made certain by evidence about a force majeure clause, which was in contemplation of parties..."

This English decision has got the imprimatur of the Apex

Court in DHANRAJAMAL GOBINDRAM VS SHAMJI

KALIDAS AND CO, AIR 1961 SC 1285. Added, the Delhi

High Court in M/S HALIBURTON OFFSHORE SERVICES

INC. VS. VEDANTA LIMITED, 2020 SCC OnLine Del 542

having referred ENERGY WATCHDOG vs. CENTRAL

ELECTRICITY REGULATORY COMMISSION, (2017) 14

SCC 80, has observed as under:

"...It is under this factual backdrop that the ground of Force Majeure taken in March, 2020 would have to be adjudged. The grounds taken to invoke the Force Majeure clause are that due to outbreak of COVID-19 experts from France who may be required cannot travel to India. Since the Force Majeure clause in the contract covers epidemics and pandemics, the Contractor claims that its non-performance is justified and the invocation of Bank Guarantees is liable to be stayed. There is no doubt that COVID-19 is a Force Majeure event..."

What the Apex Court observed in PRAVASI LEGAL CELL

vs. UNION OF INDIA, 2020 SCC OnLine SC 799 assumes

significance: "...The pandemic situation of COVID-19, has

adversely affected the economy globally, in several

sectors. Our country- India - and civil aviation sector is

not an exception to the same..."

The above position of law indisputably comes to the aid of

Petitioner.

submission of learned Panel Counsel appearing for the

respondents that whether the petitioner is entitled to

extension of the contract by way of renewal on account of

the very terms cannot be examined by this court, the

same being litigated in the arbitration. This court hastens

to clear that the extension of contractual period on

account of vis major is one thing and renewal of

contractual period, is another. What is discussed in the

immediately preceding paragraph refers to the former and

what is stated in this paragraph refers to the latter.

Similarly, the question whether the respondent-KSRTC has

not performed the contractual obligations resting on its

shoulders cannot be examined by this court. However, it is

not to say that an arbitration clause per se would oust the

constitutional jurisdiction of this court vide U.P.POWER

TRANSMISSION CORPORATION LTD., Vs. C G POWER

& INDUSTRIAL SOLUTIONS LTD, AIR 2021 OnLine

SC 243. Therefore, these are the issues which the parties

have to thrash out in the arbitration proceedings.

(d) The vehement submission of learned Panel

Counsel for the Respondents that the Apex Court order

dated 8.5.2023 in C.A.Nos.3625 and 3623-3624/2023 has

reduced the scope of the petition at hands and therefore,

the Petitioner be relegated to arbitration, is bit difficult to

countenance. In support of his contention, he pressed into

service paragraphs 3 & 4 of the order which read:

"It is open to the writ petitioner i.e. H.N.Pruthvinarayan to question the terms of the tender conditions which in its pinion are objectionable in law...None of the directions in (1), (2) and (3) above shall be construed as in any manner preventing the appellant - Kerala State Road Transport Corporation from processing and proceeding ahead with the tender notice issued by it".

What the said counsel loses sight of is the preceding

portion of the order namely paragraph (2) which has the

following text:

"It is open to the respondent (s)/writ petitioner(s) to seek such remedies as are available in law including but not confined to compensation or damages for the period it was unable to operate, in the arbitration proceeding. Further, it is also open to the writ petitioner(s) to seek such remedies as are available in respect of the demand raised against it by the appellant(s) - Corporation. All rights and contentions of the parties in this regard are kept open."

What one is construing is not a statute but a judgment of

the Apex Court of the country rendered in a set of facts

and their penumbra. It hardly needs to be stated that

construing a judgment and interpreting a statute are two

different exercises vide COMMISSIONER OF CENTRAL

EXCISE vs. SRIKUMAR AGENCIES, 2008 (232) E.L.T.

577. What is stated in paragraphs 3 & 4 of the Apex Court

order, if read in isolation, arguably the Panel Counsel

could have been right. However, these paragraphs are

preceded by paragraph No.2 and therefore, all the three

paragraphs need to be construed in harmony with each

other, as rightly contended by learned Sr. Advocate

representing the Petitioner. If viewed that way, the

sectarian argument of the Panel Counsel does not merit

acceptance. A contra argument would render what is

stated in paragraph No.2 meaningless to the detriment of

the citizen and therefore, is not acceptable. Added, if

contention of the Panel Counsel were to be true, the Apex

Court would not have remanded the matter for

consideration afresh, with the observation "Learned Single

Judge shall decide the challenge to the tender conditions

having regard to the complaint against it by the writ

petitioner(s), in W.P.No.2940/2023."

(e) This court does not much cotton with the

contention of learned Panel Counsel appearing for the

Respondents that as a Thumb Rule, in contractual matters

involving tender process, the examination of the issues

cannot be undertaken. A host of factors enter the fray in

invoking a broad proposition of the kind. In what kind of

cases, a Writ Court should grant interference is discussed

by the Apex Court in a catena of decisions. What is

reiterated in M/s OM GURUSAI CONSTRUCTION

COMPANY vs. M/s V.N.REDDY, 2023 SCC OnLine SC

1051 at paragraph 33, assumes significance:

"...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 ..."

(f) The case of the Petitioner squarely fits into the

proposition structured in the form of first question in OM

GURUSAI supra. No reasonable person would have

treated the tenure of the contract as having come to an

end on 31.1.2023 when obviously the period of pandemic

ought to have added to the benefit of the Petitioner. Just

for an askance, a worthy petition cannot be thrown away

chanting the alternate remedy as the mantra. One has to

keep in mind no litigant comes to the Court with joy in

heart. A Court litigation is not a luxury; it costs in terms

of time & money if not more. Turning away an injured

litigant, on the basis of some jurisprudential theory would

shake the confidence of right thinking people in the judicial

process. That would not augur well to the public interest,

in the long run. More than a century ago, Justice Holmes

of U.S. Supreme Court had said in DAVIS vs. MILLS, 194

U.S. 451, 457 (1904) is worth ruminating:

"Constitutions are intended to preserve practical and substantial rights, not to maintain theories."

Even the Apex Court in RAPID METRORAIL GURGAON

LIMITED vs. HARYANA MASS RAPID TRANSPORT

CORPORATION LIMITED: 2021 SCC OnLine SC 269

reiterated: "...However, access to justice by way of public

law remedy would not be denied when a lis involves

public law character and when the forum chosen by the

parties would not be in a position to grant appropriate

relief..."

(g) AS TO ADJUSTING THE COMPETING INTERESTS OF PARTIES:

The impugned e-Tender was given partial effect and

some portions of the premises having been auctioned are

allotted to successful bidders already. A part of the

premises is stated to be kept in lock & key of the second

respondent. In view of this Petition being allowed in part,

some adjustment has to be made so that none is put to

much prejudice, on the lines as discussed below:

(i) The court has to strike a golden balance between the competing claims of the parties at loggerhead. Whatever interim protection by way of status quo was given to the petitioner should continue subject to whatever has been already done by the respondent-KSRTC, in the meanwhile. In other words, if the tender in question is already operated in part, the same is liable to be left undisturbed till after and subject to the outcome of

arbitration proceedings, inasmuch as, some third party interest appears to have been created. By this adjustment, whatever little prejudice that may be arguably occasioned to the parties, can be mitigated in a just way. Court has also kept in mind the institution of arbitral proceedings, wherein certain equities also can be worked out. While devising this, wisdom is drawn from the following observations of the Apex Court in: M/s SUNEJA TOWERS PRIVATE LIMITED vs. ANITA MERCHANT, 2023 SCC OnLine SC 443:

"...We are cognizant of the prevailing market conditions as a result of Covid-19 Pandemic, which have greatly impacted the construction industry. In these circumstances, it is necessary to balance the competing interest of both parties..."

(ii) The above wisdom apart, utilitarian justice broadly requires that the institutions do endeavor something to mitigate distributional imbalances because there is a wider array of goods & services to satisfy preferences whereby selecting policies with the greatest net-benefit, effectively serves the interest of public at large. It hardly needs to be stated that in matters like this, there are other vital stakeholders namely, the commuters. The Nobel Laureate Amartya Sen in his "Idea of Justice" (London:Allen Lane, 2009) at page 395 writes:

"'... Judgments about justice have to take on board the task of accommodating different kinds of reasons and evaluative concerns. The recognition that we can often prioritize and

order the relative importance of competing considerations does not, however, indicate that alternative scenarios can always be completely ordered, even by the same person."

(h) Learned advocates appearing for the parties had

relied upon certain decisions during the course of their

arguments. However, they have not been in so many

words referred to in the course of judgment since the

latest views of the Apex Court on the same points avail

and that the same are discussed. This is being stated only

to pre-empt the possible complaint that the Rulings cited

at the Bar are not adverted to.

In the above circumstances, this Writ Petition

succeeds in part; the impugned e-tender Notification shall

not be given effect to till after and subject to outcome of

the arbitration proceedings that are stated to have been