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2022 Supreme(Kar) 284

IN THE HIGH COURT OF KARNATAKA
S.G. Pandit, J.
Aquasub Engineering – Appellant
Versus
Managing Director, Karnataka Maharshi Valmiki Scheduled Tribe Development Corporation Ltd – Respondent
Writ Petition No. 3547/2022 (Gm-Ten)
Decided On : 16-03-2022

Advocates Appeared:
Shishira Amaranth, Advocate, K.C. Sudarshan, Advocate, Deepak S. Shetty, Advocate, Uday Holla, Advocate, A.R. Taranath, Advocate, D.K. Ravindra, Advocate.

The main legal point established in the judgment is the limited scope of judicial review in tender matters and the need to consider public interest. The court emphasized the principles of judicial review in tender matters and highlighted the importance of not interfering with the award of tenders unless there is evidence of arbitrariness, irrationality, or bias.

Headnote:

Tender Process - Quashing of Appellate Order - Article 226 - Karnataka Transparency in Public Procurements Rules, 2000 - [Tender Process] - [Karnataka Transparency in Public Procurements Rules, 2000] - [Rule 26(2)(b)] - The court examined the scope of interference in tender process and emphasized that judicial review in tender matters is limited. It highlighted the principles of judicial review in tender matters and the need to consider public interest. The court found that the appellate authority's decision to cancel the tender awarded to the petitioner was not justified and quashed the appellate order, directing the respondent to issue a work order to the petitioner.

Fact of the Case:

The petitioner, a manufacturing company, was awarded a tender for the supply, installation, and electrification of irrigation submersible pumpsets. However, the appellate authority allowed the appeal of other respondents and cancelled the tender awarded to the petitioner. The petitioner challenged the appellate order under Article 226 of the Constitution of India.

Finding of the Court:

The court found that the appellate authority's decision to cancel the tender awarded to the petitioner was not justified. It emphasized the limited scope of judicial review in tender matters and the need to consider public interest. The court quashed the appellate order and directed the respondent to issue a work order to the petitioner.

Issues: The main issue was whether the appellate authority's decision to cancel the tender awarded to the petitioner required interference by the court.

Ratio Decidendi: The court emphasized the limited scope of judicial review in tender matters and the need to consider public interest. It highlighted the principles of judicial review in tender matters and found that the appellate authority's decision was not justified.

Final Decision: The court allowed the writ petition, quashed the appellate order, and directed the respondent to issue a work order to the petitioner.

JUDGMENT :

1. The petitioner, a manufacturing Company, having Captive Electrical Lamination (Stamping) Unit with high speed, high accuracy AIDA, press lines is before this Court under Article 226 of the Constitution of India praying for a writ of certiorari to quash the order dtd. 29/1/2022 passed by the 5th respondent in Appeal No.PE 61 Jr 2021 vide Annexure-S and for a writ of mandamus directing the first respondent to issue work order in furtherance of Letter of Acceptance dtd..6/11/2021 vide Annexure-C.

2. Brief facts of the case are that, the first respondent-Karnataka Maharshi Valmiki Scheduled Tribe Development Corporation Limited, Bengaluru (for short "the Corporation") issued tender notification dtd. 30/6/2021 (Annexure-B) calling tenders for the work of Supply, Installation and Electrification (Energization) of Irrigation Submersible Pumpsets with Accessories Suitable for 165 mm Dia Borewells under "Ganga Kalyana Scheme" for the year 2018-19. The last date for uploading the e-Tender to the Procurement Portal was on 12/7/2021; 7/7/2021 was the date for pre-bid meeting; 14/7/2021 was the date for opening of technical bids. The petitioner as well as respondents No.2 to 4 submitted their tenders pursuant to tender notification dtd. 30/6/2021. The petitioner's tender being the lowest tender was accepted and Letter of Acceptance was issued on 6/11/2021 as per Annexure-C. The petitioner was asked to deposit security deposit of Rs.168.68 Lakhs and to enter into an agreement with the Corporation. The petitioner is said to have deposited the security deposit and furnished Bank Guarantee for a sum of Rs.21.00 Crores on 27/11/2021.

3. Respondents No.2 to 4 aggrieved by awarding tender in favour of the petitioner and against rejection of their tenders filed an appeal before the 5th respondent. The 5th respondent on consideration of the appeal under the impugned order dtd. 29/1/2022 (Annexure-S) allowed the appeal and cancelled the tender awarded to the petitioner. The petitioner being aggrieved by cancellation of acceptance of tender in his favour is before this Court challenging the appellate order and for a direction to the first respondent to issue work order in furtherance of Letter of Acceptance dtd. 6/11/2021.

4. Heard the learned Senior Counsel Sri.Udaya Holla for Sriyuths Avaneeshnath and Ravindra D.K., learned counsel for the petitioner, learned counsel Sri.Shishira Amarnath for respondent No.1, learned counsel Sri.K.C.Sudarshan for Sri.Deepak S Shetty, learned counsel for respondents/ Caveators No.2 to 4. Perused the writ petition papers.

5. Learned Senior Counsel Sri.Udaya Holla submits that the petitioner being the lowest tenderer, his tender was accepted and Letter of Acceptance was issued on 6/11/2021 for Supply, Installation and Electrification (Energization) of Irrigation, Submersible Pumpsets with other accessories. Pursuant to the Letter of Acceptance, the petitioner has remitted the security deposit of Rs.168.68 Lakhs as well as Rs.21.00 Crores as Bank Guarantee in favour of the first respondent-Corporation. Learned Senior Counsel invites attention of this Court to the impugned appellate order dtd. 29/1/2022 and submits that the order of the appellate authority is the result of non-application of mind. In that, it is submitted that the appellate authority could not have come to a conclusion that the petitioner has suppressed the material fact of receiving the show cause notice in the affidavit enclosed to the tender documents. Learned Senior counsel elaborating his argument submits that the tender documents were submitted by the petitioner on 12/7/2021, i.e., on the last date for submitting the tender and the affidavit was also filed as on the same day. As on the date of submitting the tender documents and also on the date of filing affidavit, the petitioner was not issued with any show cause notice as reflected in the impugned order. It is his submission that the show cause notice Annexure-H dtd. 15/7/2021 was rec

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