M/S G S Management Services Pvt Ltd vs The Managing Director
2025 Latest Caselaw 6014 Kant

Karnataka High Court

M/S G S Management Services Pvt Ltd vs The Managing Director on 10 June, 2025

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                                           WA No.455 of 2024



   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 10TH DAY OF JUNE, 2025

                         PRESENT

THE HON'BLE MR V KAMESWAR RAO, ACTING CHIEF JUSTICE
                            AND
          THE HON'BLE MR JUSTICE S RACHAIAH

              WA NO. 455 OF 2024(GM-TEN)

  BETWEEN:

  M/S. G S MANAGEMENT SERVICES PVT LTD.,
  (A COMPANY REGISTERED UNDER THE INDIAN
  COMPANIES ACT, 1956)
  NO.1091, 2ND FLOOR, SRNG COMPLEX,
  OTC ROAD, NAGARTHPET,
  BENGALURU - 560 002.
  REP. BY ITS MANAGING DIRECTOR
  MR. H.S. GOPAL.
                                               ...APPELLANT

  (BY SRI. KRISHNA B S., ADVOCATE FOR
      SRI. ABHIJEET S.K. RAI., ADVOCATE)

  AND:

  1.   THE MANAGING DIRECTOR,
       BESCOM, CORPORATE SERVICE,
       K.R.CIRCLE, BENGALURU - 560 001.

  2.   THE GENERAL MANAGER (ELE.,),
       PROCUREMENT, CORPORATE OFFICE,
       BESCOM, 4TH FLOOR, K.R. CIRCLE,
       BENGALURU - 560 001.

  3.   M/S. MERU INFO SOLUTIONS, (A PARTNERSHIP FIRM)
       NO.07, 2ND FLOOR, ABOVE AXIS BANK,
                            -2-

                                        WA No.455 of 2024



    OLD OUTER RING ROAD,
    2ND STAGE, NAGARBHAVI,
    BENGALURU - 560 072.
    REP BY ITS PARTNER MR. SRIDHAR K.

                                         ...RESPONDENTS

(BY SRI. PRADUYMNA, ADVOCATE FOR
    SMT. SUMANA NAGANAND, ADVOCATE FOR R1 AND R2;
    R3 IS SERVED AND UNREPRESENTED)

     THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961, PRAYING TO
TO BE SET ASIDE THE ORDER DATED 13.12.2023 PASSED BY
THE LEARNED SINGLE JUDGE IN WP NO.8830/2023, ETC.

    THIS APPEAL HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 15.01.2025, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, ACTING CHIEF
JUSTICE DELIVERED THE FOLLOWING:

CORAM:   THE HON'BLE MR V KAMESWAR RAO, ACTING CHIEF JUSTICE
         AND
         THE HON'BLE MR JUSTICE S RACHAIAH


                    CAV JUDGMENT

(PER: HON'BLE MR V KAMESWAR RAO, ACTING CHIEF JUSTICE)

This writ appeal has been filed by the learned

counsel for the appellant challenging the order dated

13.12.2023 passed by the learned Single Judge in

WP No.8830/2023, whereby the learned Single Judge has

disposed of the petition by stating in paragraph No.11 as

under:

"11. The extension in the considered view of this Court cannot run beyond the period for which the tender is itself called. This Court would not direct that the tender should be called in a particular manner, but the extension granted for two more years or the tender being invited for one year and extendable for two years needs to have a re-look by the respondents - BESCOM for it to escape non- arbitrariness. The BESCOM shall take note of the observations made in the course of the order and have a re-look at the conditions of tender in future. The impugned order does not warrant any interference."

2. The aforesaid writ petition is a second round of

litigation by the appellant. The first one being

WP No.3206/2022, was decided by the learned Single

Judge of this Court on 28.02.2022, whereby the learned

Single Judge has dismissed the writ petition. The review

petition filed thereof was also disposed of.

3. Some of the facts to be noted are, the

respondents No.1 and 2 herein had, on 25.01.2022,

issued a tender notification with reference

No.BESCOM/BCP-1373/2021-2022 for availing Manpower

services to 100 Seater 24 x 7 Customer Helpline at

Center of Excellence, HSR Layout, Bangalore Electricity

Supply Company Limited ('BESCOM' for short), Bengaluru

for a total amount of Rs.20.97 Crores. On 07.02.2022,

the appellant filed a writ petition being

WP No.3206/2022 challenging the tender notification.

The challenge to the same was primarily questioned on

two grounds,- (i) as required under Rule 17 in Karnataka

Transparency in Public Procurements Rules, 2000 ('Rules

of 2000' for short); (ii) respondents No.1 and 2 have not

provided 30 days' time and further ground was that,

under clause 5(10) of the tender notification, a tenderer

having the annual turnover of not less than two times the

amount put to tender in any two years during the last

preceding five financial years is only qualified to submit

his tender, is bad.

4. The case of the appellant was that, such a

condition was put to favour certain tenderers and to keep

the appellant out, who was existing provider.

5. As stated above, on 28.02.2022, the

WP No.3206/2022 came to be rejected by the learned

Single Judge. The appellant filed a review petition being

RP No.413/2022. A status-report was filed by the

respondents No.1 and 2 stating that the tender tenure is

going to expire/coming to an end, in view of the same,

review petition came to be disposed of. Subsequent to

the disposal of the review petition, the appellant in a

representation dated 12.01.2023, requested respondent

no.2 not to renew the contract in favour of respondent

No.3. It was the case of the appellant that respondents

No.1 and 2 without considering the representation dated

12.01.2023, had issued an extension order extending the

contract for a period of two years and the same is

contrary to Rules of 2000 or Karnataka Transparency in

Public Procurements Act, 1999 ('Act of 1999' for short).

It was in this background that a writ petition was filed by

the appellant wherein the prayers made were the

following:

"WHEREFORE, it is most humbly and respectfully prayed that this Hon'ble Court may be pleased to:

i) Issue a Writ Of Certiorari to Quash/Set-aside extensión order dated 10.03.2023 bearing no.

BESCOM/GMP/DGMP/BC-10/2022-23/9139-44 issued by the 2nd respondent in favour of 3rd respondent vide Annexure A to the writ petition; consequently,

ii) Issue a Writ Of Certiorari to quash Clause No.6 (32) Of General Conditions Of Instructions to Bidders irn Enquiry No.BESCOM/BCP-1373/2021- 22 Vide Annexure-B

iii) To Call for Entire Tender Records (Tender Proceedings) in Tender notification bearing reference no.BESCOM/BCP-1373/2021-22 dated 25.01.2022 vide ANNEXURE-B.

iv) Issue a writ of mandamus directing the 2nd respondent to invite fresh tender proceedings in accordance with law in pursuance of representation dated 12.01.2023 given by the petitioner to the 2nd respondent vide ANNEXURE-K, with a word of caution, that no authority, whomsoever, should permit or tolerate any interference in the entire process, from anyone whomsoever, of any nature whatsoever and the eligibility/qualifying criteria should be scrupulously adhered to, in all aspects.

v) To grant such other relief's as this Hon'ble Court deems fit in the facts and circumstances of the case, including award of the cost of these proceedings, in the interest of justice and equity."

A perusal of the prayer would show that the appellant

had primarily challenged clause No.6(32) of general

conditions.

6. The case of the appellant before the learned

Single Judge was that, extending/renewing the contract

for a period of two years is arbitrary.

7. On the other hand, the case of respondents No.1

and 2-BESCOM is that, the clause No.6(32) of the tender

condition itself provide extension of contract by two

years. It was stated that, the appellant itself was the

beneficiary in the past of such extension on numerous

occasions. Therefore, the appellant cannot now turn

around and challenge the very clause, which had

benefited it in the past.

8. The learned Single Judge has, in paragraphs

No.8 to 10, stated as under:

"8. I have given my anxious consideration to the submissions made by the learned senior counsel for the respective parties and have perused the material on record.

9. The afore-narrated facts are not in dispute and lie in a narrow compass. The notice inviting tender dated 25.01.2022, in which, respondent No.3 is awarded the contract, becomes the subject matter in W.P.No.3206/2022; this comes to be dismissed on 28.02.2022; a review petition comes to be filed, which also comes to be disposed in terms of the afore-quoted order. The impugned contract awarded to respondent No.3 is extended for a period of two years by the impugned communication. What requires to be noticed is, whether the BESCOM could have extended the term by two years and not call for a fresh tender.

10. It is trite that the Tender Inviting Authority is the best to impose such conditions in the tender according to its need. This Court would not step into the shoes of the Tender Inviting Authority and tinker those conditions except in cases where such actions would become arbitrary. What merits acceptance is, the submissions qua the impugned extension. The tender notification issued in the year 2022, in which

certain clauses of the tender are germane to be noticed.

"32. The Contract is for a period of ONE year from the date of contract order and based on the satisfactory performance, the same is extendable up to two more years at the same terms & conditions of the contract. In case of any unsatisfactory performance, BESCOM has the right to cancel the order without giving any notice.

28.0 This contract is for a period of 1 year from the date of contract order and based on the satisfactory performance, the same is extendable up to two more years at the same terms & conditions of the contract. In case of any unsatisfactory situations BESCOM has the right to cancel the order without giving any notice. Contract Agency and its employees has no right to disclose any Technical secrecy, Commercial secrecy and Social secrecy of BESCOM to others."

(Emphasis added)

The aforesaid clauses permit BESCOM to extend the contract which was initially for a period of one year and extendable for two more years on the same terms and conditions of the initial contract. The tender conditions in the contract is restricted for a period of one year is discernable and based on the performance of the contract, it is extendable to two more years. If the tender is called for one year and the criteria for awarding a contract in terms of the

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said tender is only for a period of one year, extending it on the same terms and conditions for a period of two years would not inspire confidence nor generate transparency in the procedure. Though this Court would not find any fault in the impugned tender, it is for the BESCOM to streamline the grant of extension for a period of two years, as the term for which the tender is notified is for one year, and the criteria is also assessed qua 12 months in the initial tender."

We have already reproduced paragraph No.11 of the

judgment in the earlier paragraph.

Submissions:

9. Now the submission of learned counsel for the

appellant is primarily that, though the learned Single

Judge has said that the tender is for one year, but the

same cannot be extended for two years, the same would

not inspire confidence, nor generate transparency in the

procedure, but he has failed to quash the extension order

dated 10.03.2023. According to him, the learned Single

Judge has failed to direct respondents No.1 and 2 to

issue a fresh tender. That apart it was his submission

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that, the learned Single Judge without disposing of the

application filed under Order VI Rule 17 of CPC, has

disposed of the writ petition and as such, failed to

consider the grounds urged in the writ petition. It may

be stated here, vide the application under Order VI Rule

17 of CPC, the appellant had primarily sought to

incorporate prayers iv(a) and iv(b) in the following

manner:

"Proposed Amendment

Add After Prayer iv & Substiute as:

iv(a), Issue A Writ of Certiorari To Quash the financial criteria imposed at Sl.No.5(10) & 7(10) of Tender Notification bearing reference no.BESCOM/BCP-1373/2021-22 dated 25.01.2022 issued by the 2nd respondent (Vide Annexure-B) ie, "The Annual Financial Turnover Of the Bidder shall not be less than two times the amount put to tender in any two years during the last preceding five (5) financial years i.c, (2016-17, 2017-18, 2018-19, 2019-20 & 2020-21) tender notification dated 25.01.2022 (ITB)

iv(b). Issue a Writ Of Mandamus Directing the respondent no.1 and 2 to consider the bid of the

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petitioner if Participated in the tender invited pursuant to the order passed in this Writ Petition."

10. His submission is also that, the object of Act of

1999 is to prevent arbitrariness, irrationality,

unreasonableness, bias and malafide. The purpose is to

check whether the choice of decision is made lawfully and

not to check whether the choice of decision is sound. A

fair play is necessary concomitant for an administrative

body functioning in an administrative sphere or

quasi-administrative sphere, which is missing in the

present case. The extension order dated 10.03.2023

issued by respondents No.1 and 2 in favour of

respondent No.3 is a malafide exercise of power. Hence,

interference is required. He stated that, the impugned

order passed by the learned Single Judge is liable to be

set aside being without merit.

11. On the other hand, learned counsel for

respondents No.1 and 2 would justify the impugned

order passed by the learned Single Judge by stating as

under:

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I. Brief facts

BESCOM operates a 100-seater, 24x7 customer helpline at Centre of Excellence, HSR Layout, Bengaluru to receive, register and close complaints received from consumers. To avail manpower services to operate the said facility, respondent No.2 issued a tender notification dated 25.01.2022 and invited tenders from eligible bidders. The amount put to tender was Rs.20.97 crore.

As per clause 6(32) of the General Conditions of the Instructions to bidders and clause 31 of the Detailed Work Award, the contract was for a period of one year, which was extendable up to two more years on the same terms and conditions.

Sl.Nos.5(10) and 7(10) of the qualifying requirements lays down the financial criteria of the bidder. Sl.Nos.5(10) and 7(10) require that the annual financial turnover of the bidder should not be less than two times the amount put to tender in any two years during the last preceding five years.

The tender was awarded to respondent No.3 vide Letter of Intent dated 14.02.2022. Thereafter, Detailed Work Award was issued to respondent No.3 on 19.02.2022. The contract was initially awarded for a period of one year from 01.03.2022 to 28.02.2023.

Respondent No.3, on 09.01.2023, had issued a letter to respondent No.2 seeking extension of the contract for a

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further period of 2 years. The General Manager, Customer Relations, BESCOM issued a certificate on 16.01.2023 stating that the services rendered 24 x 7 by respondent No.3 were satisfactory till date. Thereafter, respondent No.2, after following due procedure and after considering all the material on record, issued an Official Memorandum dated 10.03.2023 granting approval to extend the contract period with respondent No.3 for a period of two years i.e., from 01.03.2023 to 28.02.2025.

II. Proceedings before the Learned Single Judge

The appellant had filed a writ petition being WP No.3206/2022 challenging the financial condition imposed by respondent No.1 and 2. The appellant contended that the financial condition imposed was arbitrary and unreasonable. This Court vide order dated 28.02.2022 was pleased to dismiss the writ petition. The learned Single Judge held that no error or fault can be found with the actions of respondents No.1 and 2 and that the appellant had failed to demonstrate how the financial condition would favour some and eliminate others.

The appellant sought review of the order dated 28.02.2022 in RP No.413/2022. The same was disposed of vide order dated 04.01.2023 by clarifying that the observations made in the order are on the fact situation of the present case.

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The appellant filed another writ petition being WP No.8830/2023 seeking quashing of the extension order dated 10.03.2023 issued by respondent No.2 in favour of respondent No.3 and for a writ of certiorari to quash Clause 6(32) of the General Conditions of Instructions to Bidders. The appellant contended that the extension given to respondent No.3 was malafide. This Court vide order dated 28.02.2022, had disposed of the writ petition. The learned Single Judge held that the extension order does not warrant any interference. The said order is impugned in the present writ appeal.

Granting extension is permissible under the contract

Clause 6(32) of the General Conditions of the Instructions to Bidders and clause 31 of the Detailed Work Award categorically state that the contract is for a period of one year, which can be extended up to two more years on the same terms and conditions. The option of granting extension to the successful bidder is at the discretion vested with the respondent authorities and the appellant cannot coerce the respondent authorities to exercise this discretion in a particular manner. Moreover, the services being rendered by respondent No.3 are required continuously to address the grievances faced by

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consumers. The extension granted to respondent No.3 was during the summer months when the number of complaints received increases exponentially.

The decision to grant extension to respondent No.3 was taken only after considering all aspects. Most importantly, the performance of respondent No.3 was evaluated and only after obtaining information regarding the satisfactory rendering of services by respondent No.3 that respondent No.2 proceeded to extend the period of contract. The Hon'ble Supreme Court in Shagun Mahila Udyogik Sahakari Sanstha Maryadit -Vs.- State of Maharashtra and others [(2011) 9 SCC 340] upheld the awarding of contract for one year and then extending it for two more years upon satisfactory performance.

The appellant has been the beneficiary of extension orders previously

The appellant has suppressed the fact that it was granted three extension orders from 01.03.2019 to 28.02.2022 while it was providing service. The appellant on the one hand accepted the extensions during its tenure and on the other hand has challenged the extension granted to respondent No.3. The fact that the appellant is seeking to approbate and reprobate as per its conveniences should be deprecated.

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Extension clause not challenged in the first writ petition

The appellant did not challenge the extension clause in WP No.3206/2022 and challenged it for the first time in WP No.8830/2023. The appellant having failed to challenge the contract awarded to respondent No.3 in 2022, cannot be permitted to challenge the extension given to respondent No.3 on 10.03.2023.

Financial condition is not arbitrary

Sl.Nos.5(10) and 7(10) of the qualifying requirements lays down the financial condition. The above-mentioned requirements are based on Government Order dated 14.10.2008 and BESCOM Circular dated 09.09.2020. For works costing above Rs.10 crore, in cases like the present one, the tenderer should have in the last five years achieved at least two financial years, a minimum financial turnover of not less than two times the estimated annual payments under the contract. It is submitted that the Government Order and BESCOM Circular were merely followed in the present tender notification.

Respondents No.1 and 2 invited tender for a 100-seater customer helpline for the first time in 2022. The previous tender was for a lesser number of personnel. The financial conditions mentioned in the tender notification were to ensure that the contractor had

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the capacity and resources to successfully execute the work. The increase in the requirement for manpower justifies the requirement of a higher financial capacity. Hence, there is no arbitrariness in the same.

Respondents No.1 and 2 has produced other tenders to demonstrate that the said financial condition has not been imposed for the present tender only. This Court in A. Naveenchandra -Vs.- Karnataka Neeravari Nigam Limited, Bangalore and others [2016 SCC OnLine Kar 8659] has held that the tender condition seeking minimum turnover cannot be said to be arbitrary.

Locus standi of the appellant

The appellant did not participate in the tender process and did not submit the bids in the e-procurement portal. It is settled law that a tenderer who does not participate in the tender process has no locus standi to question the tender. Ref: Judgment of the Hon'ble Supreme Court in the case of National Highways Authority of India -Vs.- Gwalior-Jhansi Expressway Limited and judgment of this Court in the case of Mahalakshmi Engineering Works and another -Vs.- Bangalore Electricity Supply Company Limited [WP No.17266/2022, decided on 09.11.2022]

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Scope of inquiry

The scope of inquiry of Courts in commercial matters and tender proceedings is very narrow. Ref:

Judgment of the Hon'ble Supreme Court in the case of Michigan Rubber (India) Limited -Vs.- State of Karnataka and others [(2012) 8 SCC 216]. While formulating conditions of a tender document and awarding of contract, greater latitude is required to be conceded to the State authorities. Ref: Judgment of the Hon'ble Supreme Court in the case of Association of Registration Plates -Vs.- Union of India and others [(2005) 1 SCC 679] and judgment of this Court in the case of T.S. Narayana and others -Vs.- Chamundeshwari Electricity Supply Corporation Limited and another [2019 SCC OnLine Kar 3889]. There has been no flouting of tender conditions or favouritism as such in the present tender. The appellant cannot insist on requirements which would be beneficial to it or seek directions to draft conditions which are tailor made to suit its requirements.

Decision Oriented Systematic Analysis (DOSA)

Mere fact of less participation in a tender does not ipso facto mean that the terms and conditions of the tender have followed a DOSA and were intended to favour a particular bidder. Ref: Judgment of the Hon'ble Supreme Court in the case of Uflex Limited -Vs.-

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Government of Tamil Nadu and others [(2022) 1 SCC 165]. Contrary to what is claimed by the appellant, the present tender was not a single bid tender. Apart from respondent No.3, KEONICS had also submitted a bid.

Savings to the State exchequer

By comparing the rates issued in the earlier Detailed Work Award with the rates issued in the present Detailed Work Award, it is clear that the rates awarded in 2022 to respondent No.3 is less compared to that awarded in 2018 to the appellant. The same is demonstrated in the table produced by respondent No.1 and 2 along with the Statement of Objections. Therefore, the extension granted to respondent No.3 has not caused any financial loss to the State.

Dispute raised by the appellant has been rendered academic

The tender awarded to respondent No.3 was initially for a period of one year from 01.03.2022 to 28.02.2023. Respondent No.3 was granted an extension for two years from 01.03.2023 to 28.02.2025. The term of the contract awarded to respondent No.3 has almost come to an end and the dispute raised by the appellant has been rendered academic. It is settled law that if an issue is

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purely academic, it would be futile for the Courts to decide the academic question.

The entire tender process was conducted in a fair and transparent manner, following all the requirements laid down in law. The extension order was also issued in compliance with all due procedures. The contract entered into with respondent No.3 permits the extension of contract by a further period of two years. The appellant cannot interfere with the contractual rights of the respondents. Moreover the appellant has, in the past, been a beneficiary of such extensions awarded to the existing contractor. In view of the fact that the process did not suffer from any vitiating factors and in the absence of any material evidence to prove the same, the relief sought cannot be granted. Most of the contentions raised by the appellant are in the nature of re-agitating the issues already decided by this Court in WP No.3206/2022. Thus, seen from any angle, the appellant has not made out any grounds whatsoever to allow the present appeal and hence, the same is liable to be dismissed.

12. In support of his submissions, he has also relied

upon the judgments of the Hon'ble Supreme Court in the

cases of N.G. Projects Limited -Vs.- Vinod Kumar

Jain and others [(2022) 6 SCC 127] and Silppi

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Constructions Contractors -Vs.- Union of India and

another [(2020) 16 SCC 489] and order of this Court

in the case of M/s. Arya Electrical -Vs.- The State of

Karnataka and others [2014 SCC OnLine Kar 920].

Analysis:

13. Having heard the learned counsel for the

parties, at the outset we may state here that, we have

already reproduced the conclusion drawn by the learned

Single Judge in the impugned order. Respondents No.1

and 2 are not in appeal against the order passed by the

learned Single Judge.

14. The facts aforesaid reveal that, the writ petition

which was decided by the learned Single Judge is a

second round of litigation. In the earlier round of

litigation, the challenge was made only with regard to

provisions of the Rules of 2000 and Act of 1999 and also

the financial eligibility conditions put by respondents

No.1 and 2 in the tender, with an allegation that it is only

to favour certain third-persons. It may be stated here

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that, there is no challenge made to clause 6(32) as has

been done in the second writ petition. The said writ

petition came to be dismissed. Even the review petition

filed by the appellant came to be disposed of. It may be

stated, the challenge in this writ petition to the extension

clause was hit by principles of constructive res judicata.

In any case it appears that, because of the eligibility

condition, the appellant had not applied for the tender

and as such, the locus of the appellant to file the writ

petition was urged.

15. In any case, the appellant had filed a writ

petition challenging the said condition. The appellant

was not successful both in the writ petition and review

petition. It is thereafter that a fresh writ petition has

been filed. The extension granted to respondent No.3

was challenged by the appellant with a further prayer

that the respondents No.1 and 2 should invite fresh

tender. The issue before the learned Single Judge was

whether clause 6(32) of the general conditions of

instructions is illegal and arbitrary.

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16. The learned Single Judge has made certain

observations in respect to such condition in paragraphs

No.8 to 11 of the impugned order, which we have already

reproduced. So in that sense, whether the extension

granted by BESCOM to respondent No.3 is justified, the

learned Single Judge has, in paragraph No.10, held that,

the tender inviting authority is the best position to

impose such conditions in the tender according to its

need. He also held that, the Court would not find fault in

the impugned tender. It is for the BESCOM to streamline

the grant of extension for a period of two years, as the

term for which the tender is notified is for one year, and

the criteria is also assessed qua 12 months in the initial

tender. He has finally said that, the impugned order

seeking granting quashing of extension of time cannot be

interfered with. If the aforesaid being the basis for the

learned Single Judge not to interfere with the impugned

action under challenge before him, we are of the view

that the said conclusion of the learned Single Judge in

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the facts of this case and the law that we have noted

above, is justified.

17. That apart, the plea, that the application for

amendment under Order VI Rule 17 of CPC was not

considered is concerned, we are of the view, the

amendments sought could not have been granted for the

reason, prayer iv(a) is a challenge to the eligibility, which

has attained finality in the first round of litigation and the

second prayer [iv(b)] cannot be granted as the same

does not arise from the prayers in the writ petition.

18. The appeal being without merit, is dismissed.

Sd/-

(V KAMESWAR RAO) ACTING CHIEF JUSTICE

Sd/-

(S RACHAIAH) JUDGE

PA