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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
M/s Macawber Beekay Pvt. Ltd. - Petitioner
Versus
M/s Bharat Heavy Electricals Ltd. & Ors. - Respondents
Writ Petition No. 20333 of 2022 (GM-TEN)
Decided On : 02-11-2022
Constitution of India , 1950 - Article 226 and 14 - Petitioner/Company claims to be specialized in providing turnkey solutions with regard to Ash Handling Plant to various industries such as power, cement, aluminum, steel including thermal power station, which face severe problems in handling bulk materials within the plant - Company also claims to provide solutions to reduce environmental pollution with conservation of energy - 5th respondent M/s.Telangana State Power Generation Company Limited sought to setup a 4000 MW capacity thermal power station, District, and sought to award contract for design, engineering, supply, erection and commissioning to 1st respondent/Bharat Heavy Electricals Limited (‘BHEL’ for short) a portion of which was ash handling plant and other coal handling plant - This was to be executed by 2nd respondent-M/s Bharat Heavy Electricals Limited Industrial Systems Group - It is claimed that entire plant was to be completed and commissioned - In furtherance of the said decision to set up a thermal power station, a NIT was issued - Petitioner was one amongst other three, who participated in tender - Tender however, was cancelled - Whether impugned tender process is shrouded with such illegality that it would become violative of Article 14 of Constitution of India and would thus be amenable to scrutiny under Article 226 of Constitution of India.
Finding of Court : Facts obtaining in case before High Court of Delhi are distinguishable qua the facts obtaining in case at hand without much ado - Though High Court of Delhi considers very office memorandum upon which reliance is placed, the reasons for setting aside tender therein were entirely different - NIT therein was not in pari materia with what is issued in case at hand. Consortium bidding therein was prohibited, but a tenderer could take assistance from a supporting company - Supporting company therein was a 100% subsidiary of Indian company registered in China and housed in China - clarification further enures to the benefit of respondent No.3 herein, as if a particular kind of assistance is sought from company bordering country, it need not be registered with competent authority - Judgment in the case of DSPC ENGINEERING PRIVATE LIMITED before Delhi High Court was reserved - In interregnum Union of India had clarified the said office memorandum - High Court of Delhi was considering an office memorandum which had not yet been clarified by Union of India - Baring this clarification, no other submission would entail any interference at hands of this Court as this Court would not sit in arm chair of experts or Tender Scrutiny Committee, which has scrutinized and found 3rd respondent to be responsive and had to be awarded the contract in its favour. [Para 24 and 25]
Result : Petition stands dismissed.
ORDER :
The petitioner-M/s.Macawber Beekay Private Limited (‘Company’ for short) is before this Court calling in question the notice inviting tender (‘NIT’ for short) and consequent issuance of letter of intent to the 3rd respondent and has sought a direction to the 2nd respondent by issuance of a writ in the nature of mandamus to award the contract to the petitioner.
2. Shorn of unnecessary details, the facts in brief that are germane for consideration of the lis, are as follows:
The petitioner/Company claims to be specialized in providing turnkey solutions with regard to Ash Handling Plant to various industries such as power, cement, aluminum, steel including thermal power station, which face severe problems in handling bulk materials within the plant. The Company also claims to provide solutions to reduce environmental pollution with conservation of energy. The 5th respondent M/s.Telangana State Power Generation Company Limited sought to setup a 4000 MW capacity thermal power station at Yadadri, Nalgunda District, Telangana and sought to award contract for design, engineering, supply, erection and commissioning to the 1st respondent/Bharat Heavy Electricals Limited (‘BHEL’ for short) a portion of which was ash handling plant and the other coal handling plant. This was to be executed by the 2nd respondent-M/s Bharat Heavy Electricals Limited Industrial Systems Group. It is claimed that the entire plant was to be completed and commissioned by October, 2021. In furtherance of the said decision to set up a thermal power station, a NIT was issued on 22-08-2018. The petitioner was one amongst other three, who participated in the tender. The tender however, was cancelled.
3. The 2nd respondent issued tender notification on 05.03.2020, wherein the petitioner and one M/s.Indure Private Limited had participated. The contract was awarded to M/s.Indure Private Limited. The said company is said to have failed in performing with the contract and accordingly, the contract was terminated. In order to complete incomplete works of M/s.Indure Private Limited of ash handling at the risk and cost of M/s.Indure Private Limited, the 2nd respondent invited tenders on 06.01.2022. In the tender proceedings, the petitioner along with one M/s.DC Industrial Plant Services Private Limited had participated. The technical bid of M/s.DC Industrial Plant Service Private Limited came to be rejected and both the technical and financial bids of the petitioner came to be accepted. The petitioner claims to have been technically capable and suitable to carry out the project. Notwithstanding that, the contract was not awarded to the petitioner and the tender proceedings itself was recalled and cancelled.
4. After all these attempts to call for tender and get the work executed failed, a tender notification comes to be issued on 24-06-2022, which is the subject notification. The subject tender notification is slightly modified with the re-packaging of scope of work in comparison to the earlier tender notification. The petitioner, the 3rd and 4th respondents participated in the tender process as notified on 24-06-2022. The petitioner/Company and respondent Nos.3 and 4 submitted both their technical and financial bids – one as independent company and the other respondent Nos.3 and 4 as consortium. The technical bid submitted by the petitioner and respondent Nos.3 and 4 were opened and both were held to be technically qualified on 27-07-2022 and thereafter, the financial bids were sought to be evaluated. While evaluating financial bids, it was found that respondent Nos.3 and 4 as consortium was the lowest L1 and the contract was sought to be awarded in favour of respondent Nos.3 and 4. In terms of the decision to award contract by the Tender Scrutiny Committee, a letter of intent was communicated to respondent Nos.3 and 4 on 29-09-2022. On coming to know that the letter of intent so communicated to respondent Nos.3 and 4, the petitioner has knocked the doors of this Court i
Point of Law : Court would not sit in the arm chair of experts or the Tender Scrutiny Committee, which has scrutinized and found the 3rd respondent to be responsive and had to be awarded the contract....
Point of law: Entire process of awarding the contract by respondent No.2 in favour of Respondent No.3 cannot be accepted as valid
Judicial review in public procurement is limited; courts refrain from interference unless clear evidence of arbitrariness or bad faith is established.
Judicial review in tender matters is limited; courts should not interfere unless actions are arbitrary, discriminatory, or biased.
Judicial interference in the matter of tenders and contracts is limited and the court should exercise restraint in interfering with the administrative decision-making process.
Judicial review of tender conditions is limited; courts should not interfere unless actions are arbitrary, discriminatory, or mala fide, ensuring public interest is prioritized.
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