Karnataka High Court
R Nagaraju vs The State Of Karnataka on 7 February, 2024
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2024:KHC:5340
WP No. 497 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 497 OF 2024 (GM-TEN)
BETWEEN:
1. R NAGARAJU
S/O RAMEGOWDA,
AGED ABOUT 46 YEARS,
R/A NO.18/A, HOSMALANGI V AND P,
KOLLEGALA TALUK, CHAMARAJANAGARA
DISTRICT - 571442
2. K MALLU
S/O LATE KARAGAIAH,
AGED ABOUT 55 YEARS,
R/A: HOSAPURA, MAGURU HOBBALI,
T NARASIPURA TALUK,
HIRIYURU, MYSORE - 571124
3. C MANTHAPPA
Digitally signed S/O CHINNAPPA
by NAGAVENI AGED ABOUT 61 YEARS,
Location: HIGH R/A: KHP COLONY,
COURT OF T NARASIPURA TOWN,
KARNATAKA TIRUMAKUGALANARASIPURA,
MYSORE - 571124
4. P VENKATAREDDY
S/O P N VENKATAREDDY,
AGED ABOUT 68 YEARS,
R/A NO.144, VIVEKANANDA NAGARA,
NARASIPURA TOWN,
BYRAPUR,
MYSORE 571124
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WP No. 497 of 2024
5. M NANDISH
S/O MARISWAMY
AGED ABOUT 52 YEARS,
R/A VIVEKANANDA NAGARA,
T NARASIPURA TOWN,
BEHIND POLICE COLONY,
BYRAPURA, MYSORE - 571124
6. K SRINIVASA REDDY
S/O K VENKATA SUBBA REDDY,
AGED ABOUT 44 YEARS,
R/A NO.7, REDDY COLONY,
VIVEKANANDA NAGARA,
T NARASIPURA,
MYSORE 571124
7. K S NAGARAJA MURTHY
S/O LATE K B SHIVARUDRAPPA,
AGED ABOUT 62 YEARS,
R/A NO.134, VIVEKANANDA NAGARA ROAD,
REDDY COLONY, T NARASIPURA TOWN,
MYSORE - 571124
8. C POTI REDDY
S/O LATE C RAMI REDDY,
AGED ABOUT 58 YEARS,
R/A: VIVEKANANDA NAGARA,
WARD NO.5, T NARASIPURA TALUK,
MYSORE - 571124
9. V C BASAVANNA
S/O VADAREGOWDA,
AGED ABOUT 51 YEARS,
R/A: ALAHALLI VILLAGE POST,
KOLLEGALA TALUK, CHAMARAJANAGARA
DISTRICT - 571442
...PETITIONERS
(BY SRI. RAKSHITHA D J., ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED BY THE ADDITIONAL SECRETARY,
DEPARTMENT OF WATER RESOURCES,
VIKASA SOUDHA, BANGALORE - 560001
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WP No. 497 of 2024
2. CAUVERY NEERAVARI NIGAMA LTD.
REPRESENTED BY ITS MANAGING DIRECTOR,
ANAND RAO CIRLCE, SHESHADRI ROAD,
GANDHI NAGAR, BANGALORE - 560001
(GOVERNMENT COMPANY UNDER THE COMPANIES ACT)
3. EXECUTIVE ENGINEER
CAUVERY NEERAVARI NIGAMA LTD.,
NO.2, VCC DIVISION, MYSORE - 577 701
4. EXECUTIVE ENGINEER
CAUVERY NEERAVARI NIGAMA LTD.,
KABINI CANALS DIVISION,
NANJANGUD, MYSORE DISTRICT - 571 301
5. EXECUTIVE ENGINEER
CAUVERY NEERAVARI NIGAMA LTD.,
KRS DIVISION, KRISHNARAJASAGARA - 571 604
6. EXECUTIVE ENGINEER
CAUVERY NEERAVARI NIGAMA LTD.,
KABINI CANAL DISTRIBUTARY DIVISION,
T NARASIPURA - 571 124
7. THE STATE OF KARNATAKA
REPRESENTED BY THE PRINCIPAL SECRETARY, PUBLIC
WORKS DEPARTMENT
VIKASA SOUDHA,
BANGALORE - 560001
...RESPONDENTS
(BY SRI. SPOORTHY HEGDE, HCGP FOR R1 AND R7;
SRI. SANDESH J. CHOUTA, SENIOR ADV. FOR
SRI. K.S.BHEEMAIAH, ADV. FOR R2 TO R6)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE
RECORDS LEADING TO THE NOTIFICATIONS DATED 21/12/2023 AND
a) QUASH i) CCNL NO.2 VCC DIV MYSORE BEARING NO.CNNL/2023-
24/CN/WORK_INDENT575 (ANNEXURE-E). ii) CCNL NO.2 VCC DIV
MYSORE BEARING NO.CNNL/2023-24/CN/WORK_INDENT618
(ANNEXURE-E1). iii) CCNL NO.2 VCC DIV MYSORE BEARING NO.
CNNL/2023-24/CN/WORK_INDENT566 (ANNEXURE-E2). iv)CCNL
NO.2 VCC DIV MYSORE BEARING NO.CNNL/2023-
24/CN/WORK_INDENT621 (ANNEXURE-E3).v) CCNL NO. 2 VCC DIV
MYSORE BEARING NO. CNNL/2023-24/CN/WORK_INDENT573
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WP No. 497 of 2024
(ANNEXURE-E4). vi) CCNL NO. 2 VCC DIV MYSORE BEARING NO.
CNNL/2023-24/CN/WORK_INDENT616 (ANNEXURE-E5). vii) CCNL
NO.2 VCC DIV MYSORE BEARING NO.CNNL/2023-
24/CN/WORK_INDENT617 (ANNEXURE-E6). viii) CCNL KC
DIVNANJUNGUD BEARING NO.CNNL/2023-24/RD/WORK_INDENT702
(ANNEXURE-E7). ix) CCNL KC DIVNANJUNGUD BEARING
NO.CNNL/2023-24/OW/WORK_INDENT622 (ANNEXURE-E8). x) CCNL
KC DIVNANJUNGUD BEARING NO.CNNL/2023-24/OW/WORK_
INDENT620 (ANNEXURE-E9). xi) CCNL KC DIVNANJUNGUD BEARING
NO.CNNL/2023-24/OW/WORK_INDENT623 (ANNEXURE-E10).
xii) CCNL KC DIVNANJUNGUD BEARING NO.CNNL/2023-
24/CN/WORK_INDENT619 (ANNEXURE-E11). xiii)CCNL KC
DIVNANJUNGUD BEARING NO.CNNL/2023-24/OW/WORK_
INDENT614 (ANNEXURE-E12). xiv) CCNL KC DIVNANJUNGUD
BEARING NO.CNNL/2023-24/OW/WORK_INDENT624 (ANNEXURE-
E13). xv) CCNL KC DIVNANJUNGUD BEARING NO.CNNL/2023-
24/OW/WORK_INDENT678 (ANNEXURE-E14). xvi)CCNL KC
DIVNANJUNGUD BEARING NO.CNNL/2023-24/RD/WORK_INDENT651
(ANNEXURE-E10). xvii) CCNL KRS DIV KR SAGAR BEARING NO.
CNNL/2023-24/IW/WORK_INDENT633 (ANNEXURE-E16). xviii) CCNL
KRS DIV KR SAGAR BEARING NO.CNNL/2023-
24/IW/WORK_INDENT632 (ANNEXURE-E17). xix) CCNL KRS DIV KR
SAGAR BEARING NO.CNNL/2023-24/IW/WORK_INDENT630
(ANNEXURE-E18). xx) CCNL KRS DIV KR SAGAR BEARING NO.
CNNL/2023-24/IW/WORK_INDENT641 (ANNEXURE-E19). xxi) CCNL
KRS DIV KR SAGAR BEARING NO.CNNL/2023-
24/IW/WORK_INDENT602 (ANNEXURE-E20). xxii) CCNL KCD DIV T
NARSIPUR BEARING NO.CNNL/2023-24/IW/WORK_INDENT703
(ANNEXURE-E21). xxiii) CCNL KCD DIV T NARSIPUR BEARING NO.
CNNL/2023-24/IW/WORK_INDENT637 (ANNEXURE-E22) AND ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING,
THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioners are before this Court calling in question
the tender notifications issued in respect of 28 tenders and has
sought certain consequential relief.
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2. Heard Smt.Rakshitha D.J., appearing for the
petitioners, the learned Senior counsel Sri. Sandesh J. Chouta,
representing respondent Nos.2 to 6 and the learned High Court
Government Pleader, Sri.Spoorthy Hedge, appearing for
respondent Nos.1 and 7.
3. The facts, adumbrated are as follows:
The petitioners claim to be a Class-I license contractors in
the business of performing the work, for which the contract is
now called. It is the case of the petitioners that the second
respondent - Cauvery Neeravari Nigama Limited has notified
tender packages on the Karnataka Public Procurement Portal in
each division by way of separate notifications. The petitioners
have now rushed to this Court calling in question the very act
of calling the tender by way of packages, which according to
the averments in the petition causes great prejudice to them.
It is the case of the petitioners that the tenders to which the
Scheduled Caste and Scheduled Tribe can participate are called
individually and the other tenders are called by way of
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packages. It is therefore they have rushed to this Court on the
last day of submission of bids on the said tenders.
4. The learned counsel appearing for the petitioners
would contend in vehemence that the second respondent has
practiced discrimination, as those tenders which are meant for
Scheduled caste and Scheduled Tribe are called individually or
they are individual tenders and the other tenders are package
system. She would submit that the State Contractors
Association has explained by way of plethora of
representations, as to why the package system will kill the
small tenderers like the petitioners. It is the further case that
the State Government is also of the opinion that the package
system should be abolished. It is the contention that the
package system notified for the subject tender has denied
participation of these petitioners in the tender.
5. Per contra, the learned Senior counsel
Sri.Sandesh J. Chouta would refute the submissions of the
learned counsel for the petitioners contending that all the
contentions that the petitioners seek to urge cannot be
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considered, as the petitioners have not participated in the
tender. Not participating in the tender, the petitioners cannot
challenge any condition of the tender. The learned Senior
counsel would place reliance upon several judgment of this
Court, which would bear consideration during the course of the
order. He would further contend that it is for the tender
inviting Authority to choose its method of calling for tenders
and not for the petitioners to seek the conditions to be in the
manner that it would suite their need.
6. The learned counsel appearing for the petitioners
would again contend that if the petitioners participate in the
tender, they cannot turn around and challenge and if it is that,
they does not participate in the tender, they cannot challenge,
will leave them high and dry, as they are estopped from
challenging. If they participate, cannot challenge, if they does
not, will give arbitrary power to the tender inviting Authority to
keep out few tenderers.
7. I have given my anxious consideration to the
contentions of respective learned counsel and have perused the
material on record.
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8. The afore-narrated facts are not in dispute. The
threshold issue that falls for consideration is whether the
petitioners can raise a challenge to the conditions of the tender
having stayed outside the tender, which would mean whether
the petitioners have locus to challenge to tender. The facts are
afore-narrated. The issue lies in a narrow compass, which need
not detain this Court for long or delve deep into the matter, as
this has been considered by this Court, in the Apex Court and
several other Courts.
This Court in the case of M/s Sri Nanjundeshwara
Traders vs. Karnataka Food and Civil Supplies Corporation
Limited1, has held as follows:
9. The Apex Court in the case of NATIONAL
HIGHWAYS AUTHORITY OF INDIA v. GWALIOR
JHANSI EXPRESSWAY LIMITED reported in (2018) 8
SCC 243 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
W.P.No.28465/2023 DD.05.01.2024
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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 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
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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 judgment of the Apex Court has been
followed by the Division Bench of the High Court of
Calcutta in the case of SUBIR GHOSH v. STATE OF
WEST BENGAL AND OTHERS reported in 2020 SCC
OnLine Cal 2213. The Division Bench of the High
Court of Calcutta also considers the fact that a
tenderer who participates in the pre-bid meeting ought
to have submitted his tender along with the
documents to raise a challenge to the tender or the
tender conditions at the later point in time. "
The Apex Court, in the later judgment, in the case of
Airport Authority of India vs. Centre for Aviation Policy, Safety
& Research (CAPSR) & Others, has held as follows:
25. We have heard learned counsel for the
respective parties at length.
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
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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.
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."
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This Court, in the case of Mahalakshmi Engineering
Works vs. Bangalore Electricity Supply Company Limited2, has
followed the aforesaid judgment of the Apex Court and that of
the Calcutta High Court and has held that a tenderer, who stays
outside the tender cannot challenge the conditions of tender.
9. The other contention of the learned counsel for the
petitioners is that the packaging system forms the tender only
to suite certain tenderers or is tailor made to help certain
tenderers. The contention is again unacceptable. As unless the
petitioners demonstrate arbitrariness in the action of the
respondent qua the tender conditions, entertainment of such
submission under Article 226 of the Constitution of India,
becomes unacceptable. It becomes opposite to refer to the
three judge Bench Judgment of the Apex Court in the case of
Tata Motors Limited vs. Brihan Mumbai Electric Supply &
Transport Undertaking (BEST) and Others3, wherein it has held
has follows:
48. This Court being the guardian of
fundamental rights is duty-bound to interfere when
W.P.No.17266/2022 DD.09.11.2022
2023 SCC Online SC 671
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there is arbitrariness, irrationality, mala fides and bias.
However, this Court has cautioned time and again that
courts should exercise a lot of restraint while
exercising their powers of judicial review in contractual
or commercial matters. This Court is normally loathe
to interfere in contractual matters unless a clear-cut
case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that
today many public sector undertakings compete with
the private industry. The contracts entered into
between private parties are not subject to scrutiny
under writ jurisdiction. No doubt, the bodies which are
State within the meaning of Article 12 of the
Constitution are bound to act fairly and are amenable
to the writ jurisdiction of superior courts but this
discretionary power must be exercised with a great
deal of restraint and caution. The courts must realise
their limitations and the havoc which needless
interference in commercial matters can cause. In
contracts involving technical issues the courts should
be even more reluctant because most of us in Judges'
robes do not have the necessary expertise to
adjudicate upon technical issues beyond our domain.
The courts should not use a magnifying glass while
scanning the tenders and make every small mistake
appear like a big blunder. In fact, the courts must give
"fair play in the joints" to the government and public
sector undertakings in matters of contract. Courts
must also not interfere where such interference will
cause unnecessary loss to the public exchequer. (See:
Silppi Constructions Contractors v. Union of India,
(2020) 16 SCC 489).
...... ...... ......
51. We are of the view that the High Court
should have been a bit slow and circumspect in
reversing the action of BEST permitting EVEY to submit
a revised Annexure Y. We are of the view that the
BEST committed no error or cannot be held guilty of
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favoritism, etc. in allowing EVEY to submit a revised
Annexure Y as the earlier one was incorrect on account
of a clerical error. This exercise itself was not sufficient
to declare the entire bid offered by EVEY as unlawful or
illegal.
52. Ordinarily, a writ court should refrain itself
from imposing its decision over the decision of the
employer as to whether or not to accept the bid of a
tenderer unless something very gross or palpable is
pointed out. The court ordinarily should not interfere in
matters relating to tender or contract. To set at naught
the entire tender process at the stage when the
contract is well underway, would not be in public
interest. Initiating a fresh tender process at this stage
may consume lot of time and also loss to the public
exchequer to the tune of crores of rupees. The
financial burden/implications on the public exchequer
that the State may have to meet with if the Court
directs issue of a fresh tender notice, should be one of
the guiding factors that the Court should keep in mind.
This is evident from a three-Judge Bench decision of
this Court in Association of Registration Plates v. Union
of India, reported in (2005) 1 SCC 679.
53. The law relating to award of contract by the
State and public sector corporations was reviewed in
Air India Ltd. v. Cochin International Airport Ltd.,
reported in (2000) 2 SCC 617 and it was held that the
award of a contract, whether by a private party or by a
State, is essentially a commercial transaction. It can
choose its own method to arrive at a decision and it is
free to grant any relaxation for bona fide reasons, if
the tender conditions permit such a relaxation. It was
further held that the State, its corporations,
instrumentalities and agencies have the public duty to
be fair to all concerned. Even when some defect is
found in the decision-making process, the court must
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exercise its discretionary powers under Article 226
with great caution and should exercise it only in
furtherance of public interest and not merely on the
making out of a legal point. The court should always
keep the larger public interest in mind in order to
decide whether its intervention is called for or not.
Only when it comes to a conclusion that overwhelming
public interest requires interference, the court should
interfere.
54. As observed by this Court in Jagdish Mandal
v. State of Orissa, reported in (2007) 14 SCC 517, that
while invoking power of judicial review in matters as to
tenders or award of contracts, certain special features
should be borne in mind that evaluations of tenders
and awarding of contracts are essentially commercial
functions and principles of equity and natural justice
stay at a distance in such matters. If the decision
relating to award of contract is bona fide and is in
public interest, courts will not interfere by exercising
powers of judicial review even if a procedural
aberration or error in assessment or prejudice to a
tenderer, is made out. Power of judicial review will not
be invoked to protect private interest at the cost of
public interest, or to decide contractual disputes."
10. The Apex Court in the afore-extracted judgment
considers the entire spectrum of the law with regard to
interference in tender/contractual matters. The Apex Court
holds that the tender inviting Authority is at liberty to choose
its own method and the only permissible judicial review would
be in the decision making process. The decision making
process in the case at hand cannot be challenged by the
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petitioners, as the petitioners have not even participated in the
tender. Despite the vehement efforts and submission of the
learned counsel for the petitioners, the petition is sans
entertainment.
11. For the aforesaid reasons, the writ petition stands
rejected.
Sd/-
JUDGE
KG
