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2017 Supreme(Kar) 511

IN THE HIGH COURT OF KARNATAKA, BENGALURU
VINEET KOTHARI, J.
OBJECT TECHNOLOGIES A REGISTERED PARTNERSHIP FIRM - PETITIONER
Versus
STATE OF KARNATAKA DEPARTMENT OF HEALTH AND FAMILY WELFARE, VIKAS SOUDHA BVENGALURU AND ORS. - RESPONDENTS
WRIT PETITION No. 28195 of 2017 (GM-TEN)
Decided On : 09-08-2017

Advocates Appeared:
FOR THE PETITIONER: SRI. MANMOHAN P.N.
FOR THE RESPONDENTS: SMT. PRATHIMA HONNAPURA

Headnote:CONSTITUTION OF INDIA, 1950 – Article 266 & Karnataka Transparency in Public Procurements Act (29 of 2000), Section 16 – Writ Petition – Alternate remedy – Plea of non-joinder of necessary party – Petition challenging cancelling work order awarded to contractor – Authority issuing tender to third party during pendency of WP without obtaining leave of court – Petitioner not party to said tender process – Alternate remedy of appeal to prescribed authority not available to contractor under Act of 2000 – Objection as to alternate remedy and non-joinder of necessary party, is unsustainable.

       CONSTITUTION OF INDIA, 1950 – Article 299, 14 – Cancellation of contract – Contract for supply of man power – Cancellation made on complaint against contractor – Alleged complaints anterior to commencement of present work order – No enquiry held or enquiry report given by Competent Authority Condition in contract empowering Authority to cancel contract without giving reasons in case of complaints, held, illegal – Cancellation, is unsustainable. Violative of principles of natural justice.

ORDER :

1. The Petitioner-Object Technologies has challenged the impugned cancellation of his work order given to him by the 3rd Respondent-District Health and Family Welfare Officer, Chikkamagalur, as an outsourcing agency for providing manpower to work in various Health Organizations in the District of Chikkamagalur, maintained by the State Government, for which, the work order was issued in favour of the petitioner vide Annexure-B dated 28.03.2017 for a period of one year commencing from 01.04.2017. The petitioner was expected to provide 56 personnel in different categories like District level Data Entry Operator, Drivers, Accounts Assistants, LDC etc.,

2. The 2nd Respondent-District Health Officer, Chikkamagalur, on the basis of certain complaints filed against the petitioner, without holding any enquiry in the matter, proceeded to cancel the said work order vide impugned order Annexure-J dated 12.06.2017 and on 16.06.2017, the said Respondent issued a fresh E-Procurement Tender Notification and awarded such fresh work order in favour of another party M/s. Gemini Security and Allied Services, Davangere on 13.07.2017, which is placed on record along with the Statement of Objections filed by the Respondents.

3. The petitioner-company filed the present writ petition in this Court on 27.06.2017 challenging the said cancellation order dated 12.06.2017, but in the absence of any interim order granted in favour of the petitioner, the 2nd Respondent came to issue fresh Tender Notification and issued the aforesaid work order in favour of the said third party M/s. Gemini Security and Allied Services, Davangere.

4. The learned counsel for the petitioner has urged before the Court that not only false complaints were made against the petitioner but the same were relied upon by the said Respondent to cancel the work order in favour of the petitioner at the threshold of the commencement of the work order on 01.04.2017 itself relying upon the complaint averments for the past period, during which the petitioner held similar work order from the said Department and the Respondent-District Health Officer has cancelled the work order, without holding any enquiry against the petitioner and allowing him any opportunity of cross-examination on such complainants by the petitioner.

5. On the other hand, the learned AGA Ms. Prathima Honnapura has urged before the Court that there were serious complaints against the petitioner of not paying the full wages to the personnel engaged by it in the previous year and the tender condition No.18 specifically stipulated that if there are complaints against the petitioner or service provider like him, the contract in question can be cancelled without assigning any reason. Clause-18 of the Agreement Annexure-C is reproduced below, which was relied upon by the learned AGA.

“18. If the service of the Outsourcing Agency is non-satisfactory or when complaint has been received from the Medical Officer, the District Health & Family Welfare Officer, Chikmagalur is vested with power to cancel your service without assigning any reason whatsoever”.

The learned AGA further drew the attention of the Court towards Section 16 of the Karnataka Transparency in Public Procurements Act, 1999, and submitted that any Tenderer aggrieved by an order passed by the Tender Accepting Authority other than the Government under Section 13 may appeal to the prescribed authority within thirty days from the date of receipt of the order. She, therefore, urged that against the work order given in favour of the third party M/s. Gemini Security and Allied Services, Davangere, the petitioner has a remedy by way of an appeal under section 16 of the said Act. She has also submitted that the said third party has not been impleaded as a party-respondent in the present case and the Court under Article 226 of the Constitution of India would be slow in interfering with the contractual matters, as in hand before this Court.

6. Having heard the learned counsels and














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