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2006 Supreme(Kar) 677
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
D.V. SHYLENDRA KUMAR, J.
SICAL LOGISTICS LIMITED, CHENNAI - Petitioner
Versus
KARNATAKA POWER CORPORATION LIMITED, BANGALORE AND OTHERS - Respondent
Writ Petition No. 10474 of 2006
Decided on : 6th September, 2006
Subject
Public Procurement - Tendering Process
Act Referred
KARNATAKA TRANSPARENCY IN PUBLIC PROCUREMENTS RULES : R.27, R.2(b), R.28, R.24, R.20(2), R.2(c), R.21
Headnote
Karnataka Transparency in Public Procurement Act, 1999 - Governmental procurements - Section 10 - Governmental procurements - Awarding of contracts - Procedure to be followed - Should be fair and non-arbitrary - Statutory requirements should be strictly complied with. See, Judicial Review and Government Contacts.
Judicial Review -Administration of State largesse by public authorities - Administration of State largesse by public authorities - Authorities which answer discription of "State" are amenable to judicial review. [D.V. Shylendrakumar, J]: Such judicial review was indeed on the touch stone of Article 14 of the Constitution of India and the said action being examined as to whether it is fair and non-arbitrary, now, in view of the present Act, the action on the part of the State and its agencies in awarding such contracts are required to be examined in the light of these statutory provisions. The Act is onlyan instance of logislative recognition and condification of the procedure for awarding such contracts and also provides the precise requirement on the part of the State and its agencies to be complied and as a touch stone on which the action can be scrutinized in exercise of the power of judicial review.
Karnataka Transparency in Public Procurement Act, 1999-Tender Bulletin - Section 2(j) - Tender Bulletin - Definition of - Is defined as a bulletion published for State as a whole or for any district or districts within State containing details of invitation, processing and acceptance of Tenders.
Karnataka Transparency in Public Procurement Act, 1999-Tender Document - Section 2(l) - Tender Document - Means a set of papaers detailing schedule of works, calendar of events, requirement of goods and services, technical specifications, procurement criteria and such other particulars, as may be prescribed for evaluation and comparison of tenders.
Karnataka Transparency in Public Procurement Rules, 2000 -Tender Document - Rule 2 (c) -"Two Cover System" - Meaning - It is a procedure under which tenderers are required to simultaneously submit two separate sealed covers, one containing Earnest Money Deposit and details of their capability to undrtake tender which will be opened first and second cover containing price quotation which will be opened only if tenderers found qualified to execute tender.
Karnataka Transparency in Public Procurement Rules, 2000 -Tender Document - Rule 28 - "Two Cover System" - Opening of - Procedure. [D.V. Shylendrakumar, J]: The scheme of the Act and Rules, very elaborately provides for the procedure which is required to be followed b efore awarding a contract in favour of the most competitve tenderer who has the necessary qualification, competence and ability. The swcheme of the Act and Rules also provides for distribution of responsibility and fun ction of awarding a contract to different authorities at different levels. Ultimately, while the decision to award the contract is that of the tender accepting authority, the tender inviting authority and the tender scrutiny committee play a supporting role in assisting the tender accepting authority to take a final decision on the tenders. Role of each authority/ committee is cut out and well regulated under the Act and Rules. As the very object and purpose of the Act is to ensure streamlining the procedure of awarding contracts by State and public procurement agencies and as the same is regulated by statutory provisions, unless the procedure is followed strictly in conformity with the Act and Rules, it amounts to violating or giving a go-by to the very object and purpose of streamlining of awarding contracts for procurement of goods and services by public agencies.
Government Contracts -Rights of tenderer - Rights of tenderer - Till a contract is awarded in favour of any person, there is no other right in favour of such person other than fair and non-discriminatory treatment on part of State mandated by Article 14 of Constitution of India.
Sri R.N. Narasimhamurthy, Senior Counsel for M/s. Poovayya and Company, Advocates for Petitioner;
Sri K.. Raghavan for M/s. Dua Associates, Advocates for Respondent-I;
Sri Sandesh Chouta, Advocate for Respondent-2;
Respondent-3 served.
This writ petition arises in the context of the Karnataka Power Corporation Limited-1st respondent having invited applications from intending bidders for the purpose of appointing a coal transportation agency for ensuring raw coal supplies from SCCL Collieries Loading Points to Raichur Thermal Power Station by All Rail Route for supply of about 20 lakh metric tons of raw coal per annum for a period of 3 years. A paper advertisement to this effect had been issued in the news daily 'Indian Express' published on 21-4-2006 that interested persons may get application forms to submit tenders and the tender documents on payment of necessary fee and depositing the earnest money deposit etc.
2. In response, it appears, as many as 12 persons including the writ petitioner and respondents 2 and 3 had purchased application and tender documents by remitting the requisite fee and depositing earnest money etc. But, it appears, only 3 persons submitted their offers in sealed tender forms and they are, petitioner and respondents 2 and 3 to the petition.
3. Submission of tender forms were to be made separately in two covers, the first cover indicating Technical Bid i.e., the necessary qualifications on the part of the tenderers and the second cover indicating the price bid i.e., the rate at which the tenderer is prepared to transport the coal. Petitioner who had submitted both the technical bid cover as also the price bid cover is aggrieved as it appears the petitioner was apprised that he does not have the requisite pre-qualification on the opening of the technical bid covers which was done on 12-6-2006.
4. Petitioner came to know that the 1st respondent was of the opinion that the petitioner did not have the pre-qualification requisites, by around 26th of July, 2006. In fact, though it is not a part of the record in this writ petition, the petitioner, it appears, has received a communication dated 27-7-2006 appraising that the petitioner is not qualified for the purpose of awarding the contract which had been notified and for which, tenders had been invited and therefore, there may not be any possibility of opening their price bid cover. It is thereafter that the petitioner has approached this Court questioning the legality of the tender process.
5. Petitioner, it is contended that though, duly fulfilled the pre-qualification requisites and was a person eligible to be considered for the purpose of examining the offer and as that possibility had been pre-empted, the present writ petition challenging such action.
6. It is the version of the petitioner that the petitioner is duly qualified to participate in the tender in terms of the pre-qualification requisites as had been indicated in the very tender documents particularly, as indicated in Para 2.00 of the tender notification furnished by the 1st respondent-Corporation.
7. Writ petition has been filed on the premise that the 1st respondent had acted at variance with the tender conditions, arbitrarily and unreasonably; that 1st respondent has declined to consider the offer of the petitioner, that the 1st respondent has not applied uniform norms in the matter of understanding of the pre-qualification requirements in terms of para 2.00 of the tender documents and that 1st respondent has in fact applied varying norms for consideration of the offers made by different tenderers particularly, petitioner vis-a-vis 2nd respondent whose offer has cleared the pre-qualification requirements and was ripe for consideration of the offer made by this respondent in its tender submission.
8. Respondents had been put on notice regarding rule and interim prayer. Respondents, on service, have entered appearance. 1st respondent-Corporation which is the one awarding contract is represented by Sri K.G. Raghavan, learned Advocate and 2nd respondent, who is accredited the status of LOI i.e., the lowest tenderer amongst the available qualified tenderers, is represented by Sri Sandesh Chouta, 3rd respondent has remained unr
