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2009 Supreme(Kar) 670
High Court of Karnataka
THE HONOURABLE MR. JUSTICE MOHAN SHANTANAGOUDAR
Logwell Forge Limited, Represented by its Managing Director, Vikas Chowdhary
Versus
Bangalore Metro Rail Corporation Ltd., Rep by its Managing Director & Others
Writ Petition No.16187 of 2009 (GM-TEN)
Decided on : 11-09-2009
For the Petitioner:K.G. Raghavan, Sr. Counsel, Ashwin Prabhu, Advocate.
For the Respondents:Naganand, Sr. Counsel, M.N. Haarish, M/s. Harish Associates, Advocates, Udaya Holla, Sr. Counsel.
Headnote:KARNATAKA TRANSPARENCY IN PUBLIC PROCUREMENTS ACT, 1999 - Section 2(d): [Mohan Shantanagoudar,J] Tender Notification for supply, installation, testing and commissioning of track work and installation third rail system for Bangalore Metro Rail Project - Tender document conditions that Bidders to use only one kind of fastening system for the tracks, washing plants and inspection bay tracks viz., VOSSLOH 336 - Petitioner aggrieved by the impugned condition - Held, It is clear that the Government of Karnataka though not fully controls the project, controls the project to a substantial extent. The word "control" used in Section 2(d) of the Act should have to be understood to mean substantial control. The word "Control", in the context, cannot be constructed as fully controlled, but it should be understood to mean substantially controlled. The 1st respondent falls within the definition of "Procurement Entity", inasmuch as, the respondent No. 1 Corporation which is established under the Company Law, is substantially controlled by the Government of Karnataka. Further, The control and the management signified the controlling and directive power. The controlling authority must be in a position to dominate the affairs of the undertaking. Such a control would be either in respect of the management of the affairs or in respect of its finances or with regard to the capital structure. Ultimately, what is required to be noted is as to whether there is substantial control by the State Government on the projector not. Having regard to the above facts and circumstances, it can be held that the State Government substantially controls the project. The project as conceived contemplated use of VOSSLOH 336 Fastening system. The Detailed Project Report prepared by DMRC has been accepted in its entirety and project is being implemented in accordance with the same. As per the Detailed Project Report, the fastening system to be used is VOSSLOH 336 Fastening system. If any other fastening system is to be used in the place of VOSSOH 336, it would lead to altering or modifying the integrated Detailed Project Report which is already approved and based on which, the work is already being carried out. As aforementioned, DMRC has prepared the Detailed project Report for Bangalore Metro and its executing it as an integrated project. While executing integrated project, one of the component i.e., fastening system cannot be changed. As on this day, there is nothing on record to show that any other fastening system is approved by the concerned authority for use in Metro Rail projects in India. The petitioner also has disputed that his product is not approved by the Railway Board or by the RDSO, Lucknow. If it is so, the petitioner cannot insist that the distribution of fastening system 336 manufactured by Schwihag AG should also be given a chance to participate in the bid in pursuance to the tender Notification. The Court is unable to accept the contention of the petitioner that the decision of the respondent No.1 arbitrary and mala fide. No Mala fidies can be attached No.1 arbitrary and mala fide. No Mala fides can be attached to the 1st respondent in insisting the intending bidders to use VOSSLOH 336 fastening system only. It cannot be said that the action of the respondents to have the impugned conditions in the tender document is purely discriminatory or mala fide. Since the Tender Document is issued in pursuant to the detailed project report, the tender inviting authority could not have gone beyond the detailed project report. Under such circumstances, this Court does not find that there is any violation of Article 14 of the Constitution of India.
Petitioner has sought for a writ in the nature of mandamus directing the 1st respondent to suitably amend the restrictive conditions imposed in Clauses 9.8.2.1. and 9.8.2.11 of Tender No.BMR/CC/TRACK 2, issued by the 1st respondent in February 2009, which is produced at Annexure-‘A’ to the writ petition.
2. The matrix of the case is as follows:
Petitioner is a public limited company registered under the Indian Companies Act, 1956, and is engaged in manufacturing of forging components, auto parts, railway parts etc., The petitioner claims that it has an association with the Swiss Company – Schwihag AG, which manufactures rail fastening systems like tension clamp SKL 12 and supplies it to the German Railways (DB). According to the petitioner, it has recently formed strategic partnership with companies in Europe for supply of fastening system 336, which is being used by many metros around the world, including Delhi Metro Rail Corporation.
3. The respondent No.1 – Bangalore Metro Rail Corporation Limited (hereinafter referred to as ‘BMRCL’ for short) is a joint venture of the Government of Karnataka and Government of India. It is an agency responsible for implementation of Bangalore Metro which is a mass transit rail system in the city of Bangalore. Respondent No.2 – Vossloh Fastening Systems GmbH is a company which is incorporated in Germany and is a leading manufacturer of rail fastening systems which are used by the Railways and local transport operators worldwide. The product range includes fastening systems for ballastless tracks and slab tracks, for all load profiles from heavy load to high speed. According to the petitioner, respondent No.2 has its presence in India for developing, manufacturing, propogating and selling fastening systems suitable for different types of railway tracks.
4. Respondent No.1 issued a tender notification in February 2009 bearing No.BMR/CC/TRACK 2 (hereinafter called as ‘Tender Document’ for short) for supply, installation, testing and commissioning of track work and installation of third rail system for Bangalore Metro Rail Project Phase-1. The relevant portion of the Tender Document is produced at Annexure-‘A’ to the writ petition. One of the sensitive and important component to be used in the project is the fastening system. Clause 9.8 of the Tender Document would stipulate the user of fastening system in the tracks. The Bangalore Metro Rail will have ballasteless tracks. Thus, fastening system suitable for ballasteless tracks for Bangalore Metro is proposed to be used by the 1st respondent. Clause 9.8.2.1 of the Tender Document states that “The fastening system VOSSLOH 336 shall be used for all plain line ballasteless tracks”. It also specifies that, depending on the radius of the tracks, fasteners with a different number of anchor bolts are to be used. Definite specifications are mentioned under the said clause. Thus, it is clear that the Tender Document mandates the bidders to use only one kind of fastening system for the tracks viz., VOSSLOH 336. Clause 9.8.4.1 states that the fastening system VOSSLOH 336 shall be used for installation in and adjacent to the washing plant. The fastening system for the washing plan shall be corrosion protected. Clause 9.8.5.1 reveals that the inspection bay tracks shall be mounted on steel columns (raised pit tracks). Vossloh Fastening System 336 shall be used for track fastening in inspection bays.
From the above, it is clear that the Tender Document mandates that the bidders shall use only one kind of fastening system for the tracks, Washing plants and inspection bay tracks viz., VOSSLOH 336. It also mandates to procure guarantee from suppliers against any manufacturing defects in service for a period of two years from the date of the commencement of train service.
5. The Petitioner, who claims to be capable of supplying identical product of fastening system at competitive rates, being aggrieved by the impugned conditions of user of VOSSLOH 336
