Karnataka High Court

M/S Sri Nanjundeshwara Traders vs Karnataka Food And Civil Supplies ... on 5 January, 2024

Author: M.Nagaprasanna

Bench: M.Nagaprasanna

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                                                              NC: 2024:KHC:652
                                                         WP No. 28465 of 2023




                   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                        DATED THIS THE 5TH DAY OF JANUARY, 2024

                                            BEFORE
                        THE HON'BLE MR JUSTICE M.NAGAPRASANNA
                        WRIT PETITION NO. 28465 OF 2023 (GM-TEN)
                 BETWEEN:

                     M/S SRI NANJUNDESHWARA TRADERS
                     A PROPRIETARY CONCERN OWNED BY
                     SRI LAKSHMI SAGAR B M,
                     S/O BUKKAPATNA MANJUNATH RAO,
                     AGED ABOUT 30 YEARS,
                     O/AT BUKKAPATNA BUS STAND,
                     BUKKAPATNA, SIRA-572115
                                                                   ...PETITIONER
                 (BY SRI. HARISH KUMAR M S., ADVOCATE)

                 AND:

                         KARNATAKA FOOD AND CIVIL SUPPLIES CORPORATION
                         LIMITED
                         TUMKUR,
                         REPRESENTED BY ITS DISTRICT MANAGER,
                         O/AT 4TH CROSS, SHANKARPURAM,
                         NEAR DODDAMANE NURSING HOME,
                         TUMAKURU-572102
Digitally signed by
PADMAVATHI B K           A GOVERNMENT UNDERTAKING CORPORATION LIMITED
Location: HIGH                                                     ...RESPONDENT
COURT OF            (BY SRI. H.M. MURALIDHAR., ADVOCATE)
KARNATAKA
                          THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
                    OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE TENDER
                    NOTIFICATION ISSUED BY THE KARNATAKA FOOD AND CIVIL
                    SUPPLIES, CORPORATION LIMITED, TUMKUR THROUGH DISTRICT
                    MANAGER, DATED NIL PUBLISHED ON 11/12/2023 AT 8.30 PM IN
                    THE WEB PORTAL HAVING TENDER NO. KFCSC / PRO/MSP/TMK/H
                    AND T/2023-24 VIDE ANNEXURE-C, ETC.

                     THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE
                 COURT MADE THE FOLLOWING:
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                                                   NC: 2024:KHC:652
                                               WP No. 28465 of 2023




                                 ORDER

The petitioner is before this Court calling in question a

notice inviting Tender dated 11.12.2023 calling for application

from the eligible tenderers for transportation and handling of

paddy and coarse grains under the Minimum Support Price

operations for Kharif Marketing session 2023-24.

2. Heard Sri.Harish Kumar M.S., learned counsel for the

petitioner and Sri.H.M.Muralidhar, learned counsel for the

respondent.

3. Facts in brief, germane for a consideration of the lis

are as follows:

The petitioner claims to be a proprietorship concern and

is in the business of providing the transport services to various

Government agencies, including the respondent-Karnataka

Food and Civil Supplies Corporation Limited (hereinafter

referred to as 'the Corporation', for short) in all the Districts

including Tumkur and other Districts. The present petition

concerns Tumkur District.

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The respondent-Corporation, on receipt of a

communication from the State Level Committee issues a notice

inviting tender on 11.12.2023 calling for tenders from eligible

persons for transportation and handling of paddy and coarse

grains, as observed hereinabove. In terms of the tender

notification, the last date for submission of the bid was

stipulated on 19.12.2023 and on 20.12.2023, it is said that the

technical bid would be opened and on the next day, the

financial bid. The subject writ petition is preferred on

15.12.2023. This Court, directed the parties to maintain status

quo in terms of the order dated 19.12.2023, which is in

subsistence even as on today.

4. The learned counsel for the petitioner would submit

that he is precluded from participating in the tender on two

grounds. The first ground is that the transport vehicle i.e., the

lorry is said to be not more than 10 years old, which would

mean that prior to the issuance of the tender notification, the

vehicle should not have crossed 10 years. The other submission

is with regard to the turn-over of each of the tenderer, which is

stipulated at a particular amount. He would further submits

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that because of these two conditions, he was not able to

participate in the tender.

5. The learned counsel representing the respondent-

Corporation, Sri.Muralidhar H.M., would vehemently refute the

submissions of the petitioner, seeking to contend that the

transportation is the food grains grown by the farmers for the

season. It is a short term Tender and therefore, the interim

order granted is running contrary to the public interest. He

would submit that there is no ground whatsoever that the

petitioner has projected for interference at the hands of this

Court.

6. The learned counsel for the petitioner would join

the issue to contend that the minimum period after issuance of

the tender notification for submission of a bid is governed

under Rule 17 of the Karnataka Transparency in Public

Procurement Rules, 2000. In terms of the said Rule, if the

tender value is beyond two Crores, the minimum period is

thirty days and therefore, there is statutory violation in giving

only seven days time to submit his bid. He would submit that it

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is one of the grounds that would annul the entire tender

notification.

7. I have given my anxious consideration to the

submissions made by the learned counsel for the petitioner and

the learned counsel for the respondent and perused the entire

material on record.

8. The aforesaid narrated facts are not in dispute. The

issue lies in a narrow compass. It is an admitted fact that the

petitioner is not a participant in the tender. He seeks to stay

outside the tender and calls the condition of the tender in

question. It is trite law that a non-participate in the tender

cannot turn around and challenge the conditions of tender even

of the score that they were tailor made to keep the tenderer

outside the purview of the tender. The said issue need not

detain this Court for long or delve deep into the matter.

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:

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"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 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

NC: 2024:KHC:652

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 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 petitioner is similarly situated as he has not

participated in the tender.

10. The afore-quoted judgment is also followed by this

Court in the case of MAHALAKSHMI ENGINEERING WORKS

Vs. BANGALORE ELECTRICITY SUPPLY COMPANY

LIMITED in W.P.No.17266/2022 disposed on 09.11.2022.

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"9. I have given my anxious consideration to the submissions made by the respective learned senior counsel and have perused the material on record. In furtherance whereof the issues that would fall for my consideration are -

(i) Whether BESCOM was right in seeking to re-

tender only those 10 tenders that were quashed by this Court? and

(ii) Whether petitioners have any locus to question any act of BESCOM qua the tender notified, notwithstanding their non-

participation in the tender process?

In the light of the second issue cutting at the root of the matter, I deem it appropriate to consider the same at the outset.

Issue No.2:

(ii) Whether petitioners have any locus to question any act of BESCOM qua the tender notified, notwithstanding their non-participation in the tender process?

10. The afore-narrated facts with regard to issuance of notice inviting tender for the works notified therein are not in dispute. The petitioners though belong to Scheduled Castes/Scheduled Tribes and reservation of 10 tenders being accorded thereto out of 50 tenders, did not participate in the tender process, are all a matter of record. The notice inviting tender did no where restrict any tenderer to participate in any tender on the NIT dated 28.03.2022. Though reservation was stipulated qua 10 tenders, the tenderers belonging to Scheduled Castes/Scheduled Tribes were not precluded from participating in the tenders of general category. As a matter of fact, there were several tenderers who did participate in both the tenders reserved for Scheduled Castes/Scheduled Tribes and in the general category. The petitioners chose to sit on the fence, did not participate in the tender process at all, neither in the 10 reserved tenders nor in the 40 unreserved tenders. Therefore, the petitioners now seek to point out lacunae in the tenders, sitting outside throughout. Whether that would be permissible is the question?

NC: 2024:KHC:652

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 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

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NC: 2024:KHC:652

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. 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 reported in 2020 SCC OnLine Cal 2213, 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.

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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. 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.

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12. For the aforesaid reasons, finding that the petitioners have no locus to maintain the petition, the petition is dismissed as unentertainable."

(Emphasis supplied)

11. Therefore, the challenge to the conditions of tender

having chosen to stay outside the tender cannot be

entertained, in the light of the afore-quoted judgments

rendered by the Apex Court, followed by the High Court of

Calcutta and this Court. The other submission is that the

conditions of the tender are such that it is tailor made to suit a

few tenderers, are also unacceptable, as conditions of tender

unless it demonstrates gross arbitrariness cannot be interfered