2013 Supreme(Kar) 283

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
N. Kumar and B.V. Nagarathna, JJ.
Sri B.R. Ganesh and Ors.
Vs.
The State of Karnataka and Ors.
AND
Gangadharaswamy M., Y.S. Channakeshava and Prabhakar
Vs.
Bruhat Bangalore Mahanagara Palike, The Chief Engineer, Yelahanka Zone, Bruhat Bangalore Mahanagara Palike and The Executive Engineer Yelahanka Zone Bruhat Bangalore Mahanagara Palike
AND
Mahesh Kumar
Vs.
Urban Development Department and Ors.
Writ Petition Nos. 39337-39354 of 2012 (GM-TENDER), Writ Petition Nos. 41987-41991 of 2012 & 43598-43610 of 2012 (GM-LB BBMP) and Writ Petition Nos. 44763-44777, 45771-45785, 47597-47611, 45771-45785, 45149 and 39597 to 39599 of 2012 (GM-TEN) Alongwith Writ Petition No. 2080 of 2013 (GM-TEN)]
Decided On: 26.04.2013

Headnote:CONSTITUTION OF INDIA - Article 226: [N. Kumar & B.V. Nagarathna, JJ] Tender - Judicial Review - The scope of interference in tender conditions by the Court is also well settled. A tender is an offer. It is something, which invites and is communicated to notify acceptance. Broadly stated, it must be unconditional, must be in the proper form, the person by whom tender is made must be able to and willing to perform his obligations. 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. 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. In the matter of formulating conditions of tender documents and award of contract, greater latitude is required to be conceded to the State authorities unless the action of tendering authority is found to be malicious and a misuse of its statutory powers, interference by Courts is not warranted. The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative or quasi-administrative sphere. However, the decision can be tested by the application of the "Wednesbury principle" of reasonableness and the decision should be free from arbitrariness, not affected by bias or actuated by mala fides. 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. The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. However, a limited judicial review may be available in cases where it is established that the terms of the invitation to tender were so tailor-made to suit the convenience of a any particular person with a view to eliminate all others from participating in the bidding process. The conditions and stipulations in a tender notice will have two types of consequences. The first is, that the party issuing the tender has the right to party issuing tender cannot deviate from the guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. If the changes affected all intending applicants alike, then they were not unless the benefit of those changes or relaxations were extended the last moment, ensure to the benefit of all intending bidders, then the question of discrimination or arbitrariness would not arise. The methods adopted for disposal of public property must be fair and transparent providing an opportunity to all the interested persons process have no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested persons in response to notice inviting tenders in a transparent manner and free from hidden agenda. One cannot challenge the terms and conditions of the tender except on the above stated grounds, the reason being the terms of the invitation to tender are in the realm of the contract. No bidder is entitled as a matter of right to insist the authority inviting tenders to enter into further negotiations unless the terms and conditions of notice so provided for such negotiations.

       CONSTITUTION OF INDIA - Article 226: [N. Kumar & B.V. Nagarathna, JJ] Tender for solid waste disposal and management from all BBMP Zones - Though Court refused to exercise its discretion under Article 226, the following directions were issued in order to see that in future such mistakes do not occur - (i) The tender notification should specify the exact area, showing the area by means of a sketch of each package. (ii) A person is entitled to bid for all the packages. But, he shall not be awarded more than five packages of his choice. (iii) Benami contracts and name lending should be strictly prohibited. If a person to whom a contract is awarded is found to be a benamidar, or name lender of the officials of the Corporation or the Corporators, including nominated members, or other elected members, the said contract is liable to be terminated. (iv) There shall be no sub-contract or introduction of a new agency or clandestine arrangement for providing service. If the is assigned in any such manner, the contract is liable to termination. (v) Specifications of the vehicles must be strictly in accordance with schedule II Sl.No.4 of the Municipal Solid Wastes (Management and Handling Rules), 2000. Vehicles used for transportation of wastes shall be covered. Waste should not be visible to public, nor exposed to open environment preventing their scattering. (vi) The technical evaluation must be strictly through e-portal and not through department/officials so that intervention of the authorities or outside agencies can be curbed. (vii) The mobilization of men and material as stipulated in clause 15.9.3 of the tender document should be done in the presence of RTO, the BBMP, vehicle supervisor, representatives of "Residents Welfare Association" and "Suchi Mitra". (viii) No objection certificate from representatives of "Residents Welfare Association" and "Such Mitra" is to be obtained before release of payment on the monthly bills. (ix) Once the contract is entered into, the particulars such as the name of the contactor with father’s name, the address, the phone numbers, the number of vehicles employed shall be displayed in the website of the Corporation for the information of the general public. (x) The tender notification shall be issued at last 120 days before the existing contract expires so that new contract can be awarded immediately after the expiry of the previous contract.

        Further directed (1) The tender condition prescribing concession to SC/ST individual both in respect of E.M.D. amount and solvency was quashed. However, those SC/ST individuals who have secured the contract, the event of their making good the shortfall namely 90% within two months from today, their contracts shall not be cancelled; (2) The BBMP shall initiate steps to award contracts in respect of 30 packages which is awarded to B.V.G India which they have offered to surrender; (3) The contract awarded to B.V.G. India in respect of (9+3) 12 packages, where they are functioning shall not be disturbed; (4) In respect of 8 packages awarded to B.V.G. India where breach is alleged, the BBMP shall take steps immediately to resolve the dispute, and in the event the said contracts are terminated, in respect of the same also the tender process shall begin immediately; (5) While framing the tender conditions the Corporation shall bear in mind the observations and directions issued in this order supra and also the orders passed from time to time in the connected public interest litigation and the steps taken and commitment, received by the Corporation from the bulk generators of garbage, as well as industrial houses and group housing associations; (6) The terms and conditions of tender shall be in conformity with the Municipal Solid Waste (Management and Handling) Rules, 2000; (7) Parties to bear their own costs.