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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
Mahalakshmi Engineering Works A Proprietorship Concern Represented By Its Proprietor Sri Nagaraju S/o Sannaswamy – Appellant
Versus
Bangalore Electricity Supply Company Limited – Respondent
Writ Petition No.17266 of 2022 (GM-TEN)
Decided on : 09-11-2022
Scheduled Castes/Scheduled Tribes category - Inviting tenders - Claim - 1st petitioner claims to be a proprietorship concern engaged in electrical contract works which would include repair and servicing of electrical transformers and claims to have a valid licence issued by competent authority to undertake such works - 2nd petitioner is an independent rate contractor engaged in same kind of electrical works - Proprietor of the 1st petitioner/Company and 2nd petitioner claim to belong to Scheduled Caste/Scheduled Tribe - Respondent/BESCOM issued a notice inviting tenders (‘NIT’ for short) for repair, reconditioning and distribution of transformers of various capacity, at Transformers Repair Centers at different Taluka Divisions coming within jurisdiction of BESCOM - Notification was issued on notifying 54 Transformer Repair Centers - A corrigendum to said notification comes to be issued on cancelling four tenders out of 54 tenders shown as Transformer Repair Centers - Tenders came to be restricted to 50 - A co-ordinate Bench of Court in terms of its order dated quashed tender notification insofar as it pertained to reservation of 10 tenders, for tenderers belonging to Scheduled Castes/Scheduled Tribes, as those were only tenders that were challenged - BESCOM tossed said judgment before Division Bench - Division Bench by its order dated dismissed appeal in Writ Appeal No affirming order passed by the coordinate Bench - Whether BESCOM was right in seeking to re-tender only those 10 tenders that were quashed by this Court?
Finding of Court : It is possible that a prospective bidder finds the terms of tender documents to be unfair or illegal and challenges same; but such challenge has to be before the time to put in bids is closed- At any rate, if a bid is made and the bid is thrown out on an illegal or unfair ground contained in tender documents, even then, a challenge can be fashioned - But a person who has not participated in the bidding process at all cannot challenge tender conditions on any ground whatsoever - This admitted aspect of the matter escaped attention of the Single Bench while passing the impugned order - order dated cannot be sustained and the same is set aside - Since best arguable case of the writ petitioner will not result in any of tender terms being altered as writ petitioner did not participate in the process at all, writ petition itself is dismissed - Nothing in this order will be construed to be an approval of terms and conditions of tender document and in an appropriate challenge, same may be considered in accordance with law. [Para 5 and 6]
Result : Petition is dismissed.
Locus to Challenge a Tender:
Only participants in the tender process have the standing (locus standi) to question the tender conditions, process, or any related acts by the tendering authority. A prospective bidder who does not participate cannot challenge the terms of the tender documents on grounds of unfairness or illegality after the bidding period has closed. This applies even if the challenger claims eligibility or belongs to a reserved category, as non-participation precludes any right to raise grievances that could affect the rights of actual participants.[Point of Law] (!) [3000493960009][3000493960010] (!) (!) (!)
Key Principle from the Judgment: - Challenges must be raised before bids close if based on perceived flaws in tender terms. - Even if a bid is submitted and rejected on flawed grounds, a challenge may be possible—but non-participants lack locus entirely. - Courts will dismiss petitions from non-participants without examining merits, as they cannot "whittle down" rights of eligible bidders who complied with the process. (!) [3000493960010] (!) (!)
Application in this Case: Petitioners, despite claiming Scheduled Caste/Scheduled Tribe status and eligibility for reserved tenders, admitted non-participation in any of the 50 tenders (neither reserved nor general). Thus, they had no locus to challenge the re-tendering of 10 quashed tenders or the overall process, leading to dismissal of the writ petition.[3000493960006][3000493960009][3000493960011] (!)
Result: Petition dismissed for lack of locus; no adjudication on tender terms' validity.[3000493960011]
ORDER :
The petitioners are before this Court calling in question 40 tenders floated by the respondent/Bangalore Electricity Supply Company Limited (‘BESCOM’ for short).
2. Heard Sri Nandakumar C.K., learned senior counsel appearing for petitioners and Sri.S.Sriranga, learned senior counsel appearing for respondent.
3. Brief facts that lead the petitioners to this Court in the subject petition, as borne out from the pleadings, are as follows:-
The 1st petitioner claims to be a proprietorship concern engaged in electrical contract works which would include repair and servicing of electrical transformers and claims to have a valid licence issued by the competent authority to undertake such works. The 2nd petitioner is an independent rate contractor engaged in the same kind of electrical works. The proprietor of the 1st petitioner/Company and the 2nd petitioner claim to belong to Scheduled Caste/Scheduled Tribe. The respondent/BESCOM issued a notice inviting tenders (‘NIT’ for short) for repair, reconditioning and distribution of transformers of various capacity, at Transformers Repair Centers at different Taluka Divisions coming within the jurisdiction of BESCOM. The notification was issued on 28-03-2022 notifying 54 Transformer Repair Centers. A corrigendum to the said notification comes to be issued on 13-04-2022 cancelling four tenders out of 54 tenders shown as Transformer Repair Centers. Therefore, tenders came to be restricted to 50.
4. Out of 50 tenders, ten tenders were reserved for persons belonging to Scheduled Castes/Scheduled Tribes category claiming them to be reserved in terms of Karnataka Transparency in Public Procurements Rules, 2000. The said tenders became a subject matter of Writ Petition No.8492 of 2022. A co-ordinate Bench of this Court in terms of its order dated 20-06-2022 quashed the tender notification insofar as it pertained to reservation of 10 tenders, for tenderers belonging to Scheduled Castes/Scheduled Tribes, as those were the only tenders that were challenged. The BESCOM tossed the said judgment before the Division Bench. The Division Bench by its order dated 02-09-2022 dismissed the appeal in Writ Appeal No.667 of 2022 affirming the order passed by the coordinate Bench.
5. After dismissal of the writ appeal and confirmation of the order passed by the co-ordinate Bench, those 10 tenders which were quashed by the co-ordinate Bench were re-tendered. The re-tender was restricted to those tenders as it was those tenders which had been the subject matter of reservation in favour of Scheduled Castes/Scheduled Tribes in the tender process.
6. The subject petition comes to be filed on 26-08-2022 calling in question all the 50 tenders that are notified by BESCOM.
7. The learned senior counsel Sri.C.K.Nandakumar representing the petitioners would vehemently contend that the petitioners were precluded from participating in the tender earlier, as they come within 10 tenders only which were reserved tenders and that having been quashed all the 50 tenders had to be re-tendered or the petitioners should be permitted to participate in all the 50 tenders. He would contend that the finding of the coordinate Bench would enure to the benefit of the petitioners and they be permitted to participate. He would but, admit that the petitioners never participated in the tender notification issued on 28-03-2022.
8. On the other hand, the learned senior counsel appearing for the respondent/BESCOM would refute the submissions to contend that the petitioners who have never participated in the tender cannot point out any lacunae in the tender. A tenderer who does not participate would not get locus to even question any part of the tender. He would submit that the issue whether the petitioners and the like, have locus, is no longer res integra as the Apex Court in the case of NATIONAL HIGHWAYS AUTHORITY OF INDIA v. GWALIOR JHANSI EXPRESSWAY LIMITED, (2018) 8 SCC 243 has considered the said issue, which is subsequently followed by a coor
Point of Law : Only a participant can question the tender, the challenge raised by petitioners who are not the participants in the subject tender, would thus tumble down. [Para 6]
The main legal point established in the judgment is the requirement to specify the tender value in the notification inviting tender, as mandated by Rule 9 of the Karnataka Transparency in Public Proc....
The main legal point established in the judgment is that the work of repairing transformers does not fall within the definition of 'Construction Works' under the 1999 Act, and therefore, reservation ....
Judicial review in tender matters is limited; unsuccessful bidders cannot later challenge tender conditions they participated under.
Point of Law : A tender process is set aside by courts only in exceptional circumstances and certainly not because the terms of the tender do not suit an individual prospective bidder.
A tender is essentially a contract between two parties and merely because one party to contract is State, basic character of transaction does not change.
Divisible tenders mandate 5% reservation for SC/ST enterprises matching lowest bid under TN Tenders Act.
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