SRI D.R.RAVISHANKAR, SR.ADVOCATE FOR
SRI SHIVRAJ S. BALLOLI AND
SRI ARUNKUMAR K.N., ADVOCATES FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO A. ISSUE A
WRIT OF CERTIORARI SETTING ASIDE THE IMPUGNED TENDERS
BEARING NO.¸ÀASÉå:PÀ.«.D.¤/mÉA/¥ÀAªÉÆÃ/¹.Dgï-439/2025-26 DATED
21.08.2025 FOR 'SUPPLY, INSTALLATION AND COMMISSIONING OF
SUBMERSIBLE PUMP SETS WITH ACCESSORIES SUITABLE FOR
165MM DIA BOREWELLS IN VARIOUS LOCATIONS IN BELAGAVI,
RAICHUR AND YADGIRI, BALLARI AND VIJAYANAGAR, BIDAR AND
KALABURAGI, KOPPAL AND GADAG, HASSAN, VIJAYAPURA AND
BAGALKOTE, HAVERI, UDUPI, DAKSHINA KANNADA AND
CHIKAMAGALUR, DHARWAD AND UTTARA KANNADA,
CHAMARAJANAGAR AND KODAGU, TUMKUR AND CHITRADURGA,
BENGALURU URBAN AND RURAL AND RAMNAGARA, KOLAR AND
CHIKKABALLAPURA, MYSORE, MANDYA, SHIVAMOGGA AND
DAVANAGERE DISTRICTS AND KARNATAKA UNDER GANGA
KALYANA SCHEME FOR THE YEAR 2025-26' INVITED BY THE 2ND
RESPONDENT AT ANNEXURE-A, A1, A2, A3, A4, A5, A6, A7, A8, A9,
A10, A11, A12, A13, A14, A15, A16 AND G RESPECTIVELY; OR IN
THE ALTERNATIVE.
A. ISSUE A WRIT OF CERTIORARI STRIKING DOWN TENDER
CONDITIONS MENTIONED IN [PART I, CLAUSE II(1)], [PART II,
CLAUSE 1(a)], [PART I, CLAUSE II, SL.NO.11], [PART I, CLAUSE II,
SL.NO.13], [PART I, CLAUSE II, SL.NO.8] IN THE IMPUGNED
TENDERS BEARING NO. ¸ÀASÉå:PÀ.«.D.¤/mÉA/¥ÀAªÉÆÃ/¹.Dgï-439/2025-26
DATED 21.08.2025 FOR 'SUPPLY, INSTALLATION AND
COMMISSIONING OF SUBMERSIBLE PUMP SETS WITH
ACCESSORIES SUITABLE FOR 165MM DIA BOREWELLS IN VARIOUS
LOCATIONS IN BELAGAVI, RAICHUR AND YADGIRI, BALLARI AND
VIJAYANAGAR, BIDAR AND KALABURAGI, KOPPAL AND GADAG,
HASSAN, VIJAYAPURA AND BAGALKOTE, HAVERI, UDUPI,
DAKSHINA KANNADA AND CHIKAMAGALUR, DHARWAD AND
UTTARA KANNADA, CHAMARAJANAGAR AND KODAGU, TUMKUR
AND CHITRADURGA, BENGALURU URBAN AND RURAL AND
RAMNAGARA, KOLAR AND CHIKKABALLAPURA, MYSORE, MANDYA,
SHIVAMOGGA AND DAVANAGERE DISTRICTS AND KARNATAKA
UNDER GANGA KALYANA SCHEME FOR THE YEAR 2025-26' INVITED
BY THE 2ND RESPONDENT AT ANNEXURE-A, A1, A2, A3, A4, A5, A6,
A7, A8, A9, A10, A11, A12, A13, A14, A15, A16 AND G.
THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 05.12.2025, COMING ON FOR PRONOUNCEMENT
THIS DAY, THE COURT MADE THE FOLLOWING:-
a. "Issue a writ of certiorari setting aside the impugned
Tenders bearing No. ¸ÀASÉå:PÀ.«.D.¤/mÉA/¥ÀAªÉÆÃ/¹.Dgï -
439/2025-26 dated 21-08-2025 for 'supply, installation
and commissioning of submersible pump sets with
accessories suitable for 165 mm dia borewells in various
locations in Belagavi, Raichur & Yadgiri, Ballari and
Vijayanagar, Bidar & Kalaburagi, Koppal & Gadag,
Hassan, Vijayapura & Bagalakote, Haveri, Udupi,
Dakshina Kannada & Chikamagalur, Dharwad & Uttara
Kannada, Chamarajnagar & Kodagu, Tumkur &
Chitradurga, Bengaluru Urban & Rural and Ramanagara,
Kolar & Chikkaballapura, Mysore, Mandya, Shivamogga &
Davanagere Districts of Karnataka under Ganga Kalyana
Scheme for the year 2025-26' invited by the 2nd
respondent at Annexures A, A1, A2, A3, A4, A5, A6, A7,
A8, A9, A10, A11, A12, A13, A14, A15, A16 & G
respectively; or in the alternative
a. Issue a writ of certiorari striking down tender conditions
mentioned in [Part-1, Clause II (1)], (Part-II, Clause
1(a)], (Part-I, Clause II, Sl.No.11], [Part-I, Clause II,
Sl.No.13], (Part-I, Clause II, Sl.No.8] in the impugned
Tender bearing No. ¸ÀASÉå:PÀ.«.D.¤/mÉA/¥ÀAªÉÆÃ/¹.Dgï 439/2025-
26 dated 21-08-2025 for 'supply, installation and
commissioning of submersible pump sets with accessories
suitable for 165 mm dia borewells in various locations in
Belagavi, Raichur & Yadgiri, Ballari and Vijayanagar, Bidar
& Kalaburagi, Koppal & Gadag, Hassan, Vijayapura &
Bagalakote, Haveri, Udupi, Dakshina Kannada &
Chikamagalur, Dharwad & Uttara Kannada,
Chamarajnagar & Kodagu, Tumkur & Chitradurga,
Bengaluru Urban & Rural and Ramanagara, Kolar &
Chikkaballapura, Mysore, Mandya, Shivamogga &
Davanagere Districts of Karnataka under Ganga Kalyana
Scheme for the year 2025-26 invited by the 2nd
respondent at Annexures A, A1, A2, A3, A4, A5, A6, A7,
A8, A9, A10, A11, A12, A13, A14, A15, A16 & G.
b. Pass any other order as this Hon'ble Court deems fit in
the interest of justice and equity."
2. Heard Sri Nitin Ramesh, learned counsel appearing for the
petitioner, Sri T. Hanumareddy, learned Additional Government
Advocate appearing for respondent No.1 and Sri D.R. Ravishankar,
learned senior counsel appearing for respondent No.2.
3. Facts in brief, germane, are as follows: -
The petitioner claims to be a proprietorship concern
established in the year 1987 and is a duly registered small scale
industry under the Micro, Small and Medium Enterprises
Development Act, 2006 ('MSME Act' for short) and is also
recognized by the Directorate of Industries and Commerce and
holds a valid ISI license and BEE star rating. The Government of
Karnataka, in the year 1983, introduces a Scheme -'Ganga Kalyana
Scheme', a fully subsidized irrigation scheme. The 2nd
respondent/Vishwakarma Communities Development Corporation
Limited (hereinafter referred to as 'the Corporation' for short)
issues a notice inviting tender for supply, installation and
electrification (energization) of irrigation submersible pump sets
with accessories suitable for 165 mm dia borewells under the Ganga
Kalyan Scheme. The petitioner is said to have emerged as the
lowest bidder and an agreement for execution of the work order
was underway in a tender notified by the Karnataka Minorities
Development Corporation. This is not the subject tender. On
21-08-2025 the 2nd respondent/Corporation issues a notice inviting
tender for the same work. The said tender excludes partnership
concerns/MSMEs from participating in the tender process and is
said to have inflated financial turnover requirement in the tender.
Being aggrieved by these two clauses of tender, the petitioner is
before this Court in the subject petition.
4. The learned counsel Sri Nitin Ramesh appearing for the
petitioner would vehemently contend that exclusion of partnership
concern/MSME from bidding in the tender process is grossly
arbitrary and violates Articles 14 and 19 of the Constitution of
India. The learned counsel submits that earlier tenders allowed
proprietorship/MSME concerns, partnership firms and Companies to
participate in the tender. The sudden exclusion is said to have left
the petitioner, which has been long standing competent bidder
ineligible at the threshold itself. The other clause that the learned
counsel submit is a high financial turnover requirement in the
impugned tender document, that in the last two financial years it
should have a large turnover, takes away the right to participate in
the tender. The learned counsel submits that being an MSME, the
petitioner is entitled to reduction in transaction cost including the
payment of earnest money deposit. The learned counsel submits
that in none of the tendering Corporations under the Ganga Kalyana
Scheme including the 2nd respondent had previously required BIS
and BEE license for 6 HP 14-stage pump sets. However, the
inclusion of BIS and BEE license requirement in the tender
document deviates from the past practices and, therefore, is
arbitrary.
5. Per contra, the learned senior counsel Sri D.R. Ravishankar
representing the Corporation would vehemently contend that the
petitioner though claims to be an MSME, it is only qua those items
there can be exemption of earnest money deposit. Submersible
pump set procurement does not come within the ambit of 358 items
mentioned in the notification. The learned senior counsel, insofar as
other aspects are concerned, would submit that it is the Tender
Inviting Authority who has a right to impose those conditions that
are necessary for execution of tender, which cannot mean that this
Court could extend its protective arm under Article 226 of the
Constitution of India to tinker with those clauses. The learned
senior counsel submits that raising a bore well depth throughout
the State is due to ground water levels are depleting rapidly, as a
result of which higher head pumps are notified and the requirement
of certificates of BIS and BEE cannot be said to be arbitrary. He
would seek dismissal of the petition.
6. I have given my anxious consideration to the submissions
made by the respective learned counsel and have perused the
material on record.
7. The afore-narrated facts are not in dispute. The petitioner
is said to be an MSME under the MSME Act. The learned counsel for
the petitioner places reliance upon Government of India guidelines
of the year 2012 for the purpose of benefits of MSME. He would
seek to place reliance on Clauses 3.3, 10 and 11. The said clauses
of the Public Procurement Policy for Micro and Small Enterprises
(MSES) Order, 2012 reads as follows:
"3. Mandatory procurement from Micro Small and
Enterprises. - (1) Every Central Ministry or Department or
Public Sector Undertaking shall set an annual goal of
procurement from Micro and Small Enterprises from the financial
year 2012-13 and onwards, with the objective of achieving an
overall procurement of minimum of 25 per cent, of total annual
purchases of products produced and services rendered by Micro
and Small Enterprises in a period of three years.
(2) Annual goal of procurement also includes sub-
contracts to Micro and Small Enterprises by large enterprises
and consortia of Micro and Small Enterprises formed by National
Small Industries Corporation.
(3) After a period of three years i.e. from 1st April
2015, overall procurement goal of minimum of 25 per
cent shall be made mandatory.
(4) The Central Ministries, Departments and Public Sector
Undertakings which fail to meet the annual goal shall
substantiate with reasons to the Review Committee headed by
Secretary (Micro, Small and Medium Enterprises), constituted in
Ministry of Micro, Small and Medium Enterprises, under this
Policy.
... ... ...
10. Reduction in transaction cost. ─ To reduce
transaction cost of doing business, Micro and Small
Enterprises shall be facilitated by providing them tender
sets free of cost, exempting Micro and Small Enterprises
from payment of earnest money, adopting e-procurement
to bring in transparency in tendering process and setting
up a Grievance Cell in the Ministry of Micro, Small and
Medium Enterprises.
11. Reservation of specific items for procurement. ─
To enable wider dispersal of enterprises in the country,
particularly in rural areas, the Central Government
Ministries or Departments or Public Sector Undertakings
shall continue to procure 358 items (Appendix) from
Micro and Small Enterprises, which have been reserved
for exclusive purchase from them. This will help in
promotion and growth of Micro and Small Enterprises,
including Khadi and village industries, which play a
critical role in fostering inclusive growth in the country."
(Emphasis added)
Clause 3(3) of Order 2012 mandates that after a period of three
years from 01-04-2015, overall procurement goal of minimum of
25% to be given to MSME is mandatory. Clause 10 deals with
reduction of transaction cost, which includes reduced earnest
money deposit. Clause 11 deals with reservation of specific items
for procurement. The specific items that are notified under the said
order are about 358.
8. The policy quoted supra talks of reservation under Clause
11. The reservation is qua 358 items. It is an admitted fact that
submersible pump sets procurement is not the one notified under
the said notification. Therefore, the impugned tender is a tender
that called for installation of submersible pumps. MSME cannot
demand that reservation under the policy of 25% must be in favour
of MSME. Therefore, it stands as in other partnership concern,
which the petitioner is. All other benefits that the petitioner is
claiming as an MSME would flow from the afore-quoted enterprise
order where there is no mention of submersible pump set.
9. The other ground of challenge is, that earlier tenders
across Karnataka called for submersible pumps with 5 HP - 14 stage
and now it is 6 HP - 14 stage. The allegation is that it is made to
favour certain tenderers. The justification in the objections for the
said change from 5 HP to 6 HP is as follows:
"THE PRACTICAL REASONS BEHIND THE INTRODUCTION OF
OUR NEW 6 HP/14 STAGE SUBMERSIGLE PUMPSET, MODEL.
(a) Rising Borewell Depths: Groundwater levels across
Karnataka are depleting rapidly, requiring higher head
pumps. The 5 HP/14 Stage, though popular earlier, is now
proving insufficient in many locations. The 6 HP/14 Stage
is designed to address this gap effectively.
(c) Dual Substitution Advantage: It acts not only as a
superior substitute for 5 HP/14 Stage, but also effectively
replaces the 7.5 HP/12 Stage. Farmers who earlier had to
shift to 7.5 HP models can now opt for 6 HP achieving the
same performance at a lower investment and operating
cost.
(d) Economical in Installation Cabling: 6 HP pumps can run
efficiently on 2.5 sq. mm cable, whereas 7.5 HP requires
4 sq. mm cable, which is nearly double in cost.
Starter & accessories: Starters and protection devises for
7.5 HP are more expensive. With 6 HP, farmers save
considerably on overall installation cost.
(e) Energy Efficiency: 6 HP consumes significantly less power
compared to 7.5 HP, reducing the electricity bill and
making it more suitable for rural areas with limited power
supply.
5. Farmer-Friendly Model: The 6 HP has become widely
recognized in the market as the "Farmer's Choice"
because: It balances affordability, efficiently, and
performance. It is suitable for most borewell depths
encountered in Karnataka. It offers farmers the flexibility
to avoid both the limitations of 5 HP and the high costs of
7.5 HP models.
(f) Market Acceptance: The 6 HP model is already well
accepted and loved across Karnataka, proving its
relevance and demand. It stands as the most practical
and sustainable choice for today's ground water
conditions. In conclusion, the introduction of the 6 HP/14
stage model is a timely and farmer-oriented decision. It
provides a balanced, economical and technically superior
solution, addressing the challenges of lowering ground
water levels while reducing installation and operating
costs."
The objections of the Corporation are completely acceptable, as
it is settled principle of law that this Court would not sit in the
arm chair of experts like the Tender Inviting Authority and
decide whether calling for tenders for 5 HP/14 stage matter is
necessary or a 6 HP/14 stage matter would be necessary. These
are aspects which the Tender Inviting Authority is entitled to
prescribe owing to the necessity. The necessity is what is
indicated hereinabove. Therefore, none of the grounds urged by
the petitioner would hold any water in the light of the judgment
of the Apex Court in the case of AIRPORT AUTHORITY OF
INDIA v. CENTRE FOR AVIATION POLICY, SAFETY &
RESEARCH (CAPSR)1, wherein the Apex Court holds as follows:
"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.
28. While considering the scope and ambit of the High
Court under Article 226 of the Constitution of India with
respect to judicial scrutiny of the eligibility criteria/tender
conditions, few decisions of this Court are required to be
referred to, which are as under:
29. In the case of Maa Binda Express Carrier (supra), in
paragraph 8, this Court observed and held as under:
"8. The scope of judicial review in matters relating to award
of contracts by the State and its instrumentalities is settled by a
long line of decisions of this Court. While these decisions clearly
recognise that power exercised by the Government and its
instrumentalities in regard to allotment of contract is subject to
judicial review at the instance of an aggrieved party, submission
2022 SCC OnLine SC 1334
of a tender in response to a notice inviting such tenders is no
more than making an offer which the State or its agencies are
under no obligation to accept. The bidders participating in the
tender process cannot, therefore, insist that their tenders should
be accepted simply because a given tender is the highest or
lowest depending upon whether the contract is for sale of public
property or for execution of works on behalf of the Government.
All that participating bidders are entitled to is a fair, equal and
non-discriminatory treatment in the matter of evaluation of their
tenders. It is also fairly well settled that award of a contract is
essentially a commercial transaction which must be determined
on the basis of consideration that are relevant to such
commercial decision. This implies that terms subject to
which tenders are invited are not open to the judicial
scrutiny unless it is found that the same have been tailor-
made to benefit any particular tenderer or class of
tenderers. So also, the authority inviting tenders can enter into
negotiations or grant relaxation for bona fide and cogent reasons
provided such relaxation is permissible under the terms
governing the tender process."
30. In the case of Michigan Rubber (India) Ltd. (supra), after
considering the law on the judicial scrutiny with respect to
tender conditions, ultimately it is concluded in paragraph 23 as
under:
"23. From the above decisions, the following principles
emerge:
(a) The basic requirement of Article 14 is fairness in action
by the State, and non-arbitrariness in essence and substance is
the heartbeat of fair play. These actions are amenable to the
judicial review only to the extent that the State must act validly
for a discernible reason and not whimsically for any ulterior
purpose. If the State acts within the bounds of reasonableness,
it would be legitimate to take into consideration the national
priorities;
(b) Fixation of a value of the tender is entirely within
the purview of the executive and the courts hardly have
any role to play in this process except for striking down
such action of the executive as is proved to be arbitrary
or unreasonable. If the Government acts in conformity
with certain healthy standards and norms such as
awarding of contracts by inviting tenders, in those
circumstances, the interference by courts is very limited;
(c) In the matter of formulating conditions of a tender
document and awarding a contract, greater latitude is
required to be conceded to the State authorities unless
the action of the tendering authority is found to be
malicious and a misuse of its statutory powers,
interference by courts is not warranted;
(d) Certain preconditions or qualifications for tenders
have to be laid down to ensure that the contractor has the
capacity and the resources to successfully execute the
work; and
(e) If the State or its instrumentalities act reasonably, fairly
and in public interest in awarding contract, here again,
interference by court is very restrictive since no person can
claim a fundamental right to carry on business with the
Government."
31. In the aforesaid decision, it is further observed that the
Government and their undertakings must have a free hand
in setting terms of the tender and only if it is arbitrary,
discriminatory, mala fide or actuated by bias, the courts
would interfere. It is further observed that the courts
cannot interfere with the terms of the tender prescribed by
the Government because it feels that some other terms in
the tender would have been fair, wiser or logical."
(Emphasis supplied)
The Apex Court, in the afore-quoted judgment, holds that
conditions of tender unless found to be grossly arbitrary, this Court,
under Article 226 of the Constitution of India, should be loathe to
interfere.
10. In the result, the petition lacking in merit, stands
rejected.
Interim order of any kind operating shall stand dissolved.
SD/-
(M.NAGAPRASANNA)
JUDGE
bkp
CT:MJ
