Alok Aradhe, J.

Mr. Srinivasa Raghavan V., learned Senior counsel along with Mr. Arjun Pal, Mr. Tripathi and Mr. Tejas, learned counsel for the petitioner.

Mr. M. Nagaprasanna, learned senior counsel along with Mr. H.R. Showri, learned counsel for respondent No.1.

Mr. A.G. Holla, Learned Senior Counsel along with Mr. P.D. Vishwanath, learned counsel for respondent No.2.

2. The writ petition is admitted for hearing. With consent of the learned counsel for the parties, the same is heard finally.

3. This petition under Article 226 of Constitution of India has been filed by the petitioner being aggrieved by the decision of the Tender Inviting Authority viz., respondent No.1 to proceed to take steps towards awarding the works under the request for proposal for selection of local system integrator for implementation of integrated command and control center and smart elements in Shivamogga dated 21.03.2018 to respondent No.2. In order to appreciate petitioner's grievance, relevant facts need mention, which are stated hereinafter:

4. The respondent No.1 viz., Shivamogga Smart City Ltd., floated a tender for selection of local system integrated command and control center in Shivamogga on 21.03.2018. The bidders were required to submit the bids in two parts viz., technical and commercial bids. In response to the aforesaid tender, five bidders submitted their bids. The petitioner and respondent No.2's technical bid was found to be responsive and their commercial bids were opened. It is the case of the petitioner that respondent No.2's financial bid ought to have been rejected on account of deviations from the terms and conditions of the tender. However, the respondent No.1 sought clarifications vide communication dated 21.10.2018 from the respondent No.2 on its commercial bid and on the basis of clarifications dated 25.10.2018 received, by respondent No.2 changed the commercial bid and price submitted by respondent No.2 based on the report dated 05.11.2018 submitted by Project Management Consultants, which is in contravention of the terms and conditions of the tender. It is also averred that the respondent No.1 by seeking and permitting the clarifications as recorded in the Minutes of the proceedings dated 14.11.2018 has acted beyond its jurisdiction by purporting to exercise the discretion, which it did not possess viz., in permitting the changes to the price quoted by the respondent No.2 and substance of the respondent No.2's commercial bid. It is stated in the petition that respondent No.2's bid is changed from Rs.48.47 Crores to Rs.46.07 Crores. In the aforesaid factual background, the petitioner has approached this Court.

5. Learned Senior Counsel for the petitioner submitted that each commercial bid as per the terms of the tender had two components viz., capital expenditure costs and operating expenditure costs and under the tender, a bidder was required to provide three years of warranty by default. While referring to condition 8.3 of the tender, it is pointed out that the aforesaid condition provided a format for quoting operating expenditure and the tender clearly prescribed that costs associated in relation to warranty for first three years were to be included in the capital expenditure itself and the bidder was required to quote Annual Maintenance Costs only for balance two years of project in the form of operating expenditure as warranty would cover the first three years of the project. It is further submitted that respondent No.2's commercial bid was not in accordance with the terms of the tender as it quoted amounts towards annual maintenance costs for all five years of the project and the respondent No.2 could not have quoted amounts towards Annual Maintenance Costs for first three years and should have quoted annual maintenance costs only for last two years and therefore, the commercial bid of respondent No.2 ought to have been rejected on account of non compliance with the terms of the tender in view of condition 2.2