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2019 Supreme(Kar) 859
IN THE HIGH COURT OF KARNATAKA
ALOK ARADHE, J.
M/s. Siddharth Infotech Pvt. Ltd. - Appellant
Versus
Government of India Ministry of Human Resources Development - Respondent
Writ Petition No. 56088 of 2016, 1982 of 2018
Decided on : 11-09-2019
Advocate Appeared:
Chintan Chinnappa, Adv., S.R. Dodawad, Adv., M. Vinod Kumar, Adv., Nishanth A.V., Adv., K.S. Mahadevan, Adv., A.S. Ponnanna, Adv., Leela P. Devadiga, Adv.
Headnote:
Constitution of India,1950 - Article 226 - Invocation of writ jurisdiction - Claim a contract – Quash - Petitioner seeks a writ of certiorari for quashment of order as well as communication issued by respondent and consequent cancellation of contract by respondent vide letter in favour of petitioner Company in relation to project namely ICT Phase - Petitioners also seek a writ of certiorari for quashment of notice as well as writ of mandamus to respondent to refund / release bank guarantees to tune to petitioners and its consortium partners along with interest –Held, Petitioners submitted that contract which was executed between State Government and KEONICS itself provides that KEONICS can appoint subcontractors and aforesaid fact has to be notified to State Government- Similar clause is contained in contract which was executed by Everonn and KEONICS- It is further submitted that in supplemental agreement petitioners had furnished bank guarantee which was accepted by State Government and State Government had invoked bank guarantee- It is further pointed out that in order passed by State Government it is provided that any breach by any member of consortium shall be considered breach by principal contractor and thereupon bank guarantee can be encashed- Lastly it is pointed out that since there is no agreement between petitioner and either State Government or KEONICS therefore this petitioner cannot invoke arbitration clause and petitioner has no other remedy but to approach this Court and petitioner cannot be rendered remedyless- Learned Senior counsel for petitioner also submitted that since is liquidation therefore petitioner is not in a position to complete contract which was awarded Court should entertain writ petition would largely depend on nature of dispute and if dispute cannot be resolved without adjudicating factual controversy High Court should not entertain writ petition- It is well settled proposition that powers Article Constitution of India will not ordinarily be invoked if arbitration clause exists and if disputed questions of fact and law arise for consideration parties should be relegated to remedy of arbitration agreement- (See: EMPIRE JUTE COMPANY LIMITED AND OTHERS supra)- It is also equally well settled legal proposition that jurisdiction of writ court exercising power of judicial review is limited- Where action of State is found to be unfair unreasonable or arbitrary High Court can exercise its jurisdiction – Order accordingly
JUDGMENT :
ALOK ARADHE J.
Mr.Chintan Chinnappa, learned counsel for the petitioner.
Mr.S.R.Dodawad, learned Central Government Counsel for the respondent No.1.
Mr.M.Vinod Kumar, learned Additional Government Advocate for the respondent Nos.2 and 6.
Mr.Nishanth A.V., learned counsel for the respondent No.7.
Mr.K.S.Mahadevan, learned counsel for the respondent No.8.
Mr.A.S.Ponnanna, learned Senior counsel for Smt.Leela P. Devadiga, learned counsel for the respondent No.6.
2. Since common questions of law and fact arise for consideration in these writ petitions, therefore, they were heard analogously and are being decided by this common order.
3. The petitioner in W.P.No.56088/2016 namely M/s. Siddharth Infotech Private Limited seeks a writ of certiorari for quashment of order of cancellation of contract dated 05.07.2016. The aforesaid petitioner also seeks a writ of certiorari for quashment of direction dated 30.07.2016 issued by the Principal Secretary to the Commissioner, Public Instructions by which he has been directed not to return the bank guarantees and to terminate the contract with immediate effect. The petitioner in W.P.No.1982/2018 seeks a writ of certiorari for quashment of order dated 05.07.2016 as well as the communication issued by respondent No.5 to respondent No.7 dated 11.08.2016 and consequent cancellation of contract by respondent No.7 vide letter dated 16.08.2016 in favour of the petitioner Company in relation to the project namely ICT Phase-III. The petitioners also seek a writ of certiorari for quashment of notice dated 12.12.2016 as well as writ of mandamus to respondent Nos.2 to 7 to refund / release the bank guarantees to the tune of Rs. 22,43,15,270/- to the petitioners and its consortium partners along with interest.
4. Facts giving rise to the filing of the petitions briefly stated are that in 2004 respondent No.1 namely Government of India introduced the scheme known as Information and Communication Technologies at Schools (hereinafter referred to as 'the ICT' for short) with primary object of spreading computer literacy program amongst the students and modernizing and upgrading computer hardware and infrastructure in schools. The scheme was approved by the Government of Karnataka and it decided to implement ICT Phase-III project in 1763 Government high schools and 2633 in Government aided schools in the State of Karnataka. It was agreed that the Central Government would provide a sum of Rs.5,00,000/- to each school whereas the State Government shall contribute a sum of Rs.1,70,000/- to each school. The total value of the project was approximately 426 crores. In 2009-10, it was decided to get the project executed to M/s. Karnataka State Electronics Development Corporation (hereinafter referred to as 'the KEONICS' for short). The KEONICS was required to float a tender to implement the project. The KEONICS called for a national competitive bidding on 30.08.2010 by way of a request for proposal and the successful bidder were required to provide site preparation, supply of computer hardware, software and accessories and computer educational services. The request for proposal floated by KEONICS permitted a consortium to submit its bid for the project.
5. The petitioner in W.P.No.1982/2018 submitted the bid as primary tender along with the then consortium partners. The Tender Scrutiny Committee approved the tender of the petitioner in W.P.No.1982/2018 on 18.03.2011. A decision was taken by the Chief Minister on 26.05.2011 by which decision of the Cabinet to proceed with the tender process initiated by the KEONICS was approved. Thereafter, on 22.07.2011, KEONICS and Commissioner for Public Instructions entered into an agreement for supply, installation and annual maintenance of the project. Clause 1 of the aforesaid agreement dealt with subcontracts and KEONICS was required to notify in writing all subcontracts awarded under the contract. A back to back agreement was signed between KEONICS and the petitioner in W.P.N
