Once the award is notified and the contract is executed, the tender cannot be unilaterally cancelled. Arbitrary cancellation of a tender by a state authority is violative of Article 14 of the Constitution of India.

ORDER :

The petitioner is before this Court seeking a direction by issuance of a purchase order in terms of Notification of re-tender issued by the 2nd respondent dated 27-10-2021 and award of contract dated 02.03.2022.

2. Heard Sri K.Satish, learned counsel appearing for the petitioner; Sri M.Vinod Kumar, learned Additional Government Advocate appearing for respondents 1, 3 to 5 and Smt. Sumana Baliga M., learned counsel appearing for respondent No.2.

3. Brief facts that lead the petitioner to this Court in the subject petition, as borne out from the pleadings, are as follows :-

The petitioner claims to be a registered Company under the Companies Act, 1956 and is in the business of procurement of medical and allied equipments and distribution thereto and claims to have a Pan India presence. The 2nd respondent/ Karnataka State Medical Supplies Corporation Limited (hereinafter referred to as ‘the Corporation’ for short) issues a notice inviting tenders dated 27-10-2021 for procurement of 100mA Portable X-ray machines, ICU Cots and Syringe Pump. It was to be a two cover tender, in terms of the Karnataka Transparency in Public Procurement Act, 1999 (‘the Act’ for short) and the Karnataka Transparency in Public Procurement Rules, 2000 (for short ‘the Rules’). The issue in the lis concerns only item No.2 in the Tender i.e., 100mA Portable X-ray machines. The petitioner finding itself eligible, submits the tender in terms of the tender Notification along with another tenderer. Therefore, there were two tenderers pursuant to the tender notification dated 27.10.2021.

4. After scrutiny by the Tender Scrutiny Committee, the petitioner was declared to be technically qualified and later emerged as the successful bidder. On the Tender Scrutiny Committee declaring the petitioner to be the successful bidder, the petitioner was called for negotiations with regard to the final price and certain reduction in the final price. The petitioner, in terms of his communication dated 09.02.2022, reduced the price from Rs. 19,34,640/-to Rs. 18,95,947/-. After talks of negotiations were successful, a notification is issued by the 2nd respondent/Corporation notifying the award of contract in favour of the petitioner on 02-03-2022. Pursuant to the notification of award, an agreement was also signed between the parties and thereafter, a demand draft for supply of 165 Portable X-ray machines of 100mA was submitted by the petitioner for issuance of purchase order and a separate agreement for such purchase was also entered into between the parties. In spite of all these, no purchase order was issued as was required, in terms of the tender notification and the agreement entered into between the parties.

5. It is at that juncture, the petitioner knocked the doors of this court with the present petition. This Court initially directed the learned Additional Government Advocate to secure instructions as to what has become of the tender. After issuance of notice the petitioner is communicated a cancellation of tender order, in terms of its electronic mail communication dated 03.11.2022. It is then this Court on 12-12-2022 has passed a detailed order restraining the respondents from re-tendering and reserved liberty in the respondents to issue purchase order in favour of the petitioner. The said act did not come about. Therefore, the matter, with the consent of parties, was heard.

6. The learned counsel appearing for the petitioner would contend with vehemence that the tender did not stop at the stage of scrutiny of documents. The petitioner emerged as the successful bidder, award was notified in favour of the petitioner, contract was entered into with the petitioner and a demand draft, as demanded by the 2nd respondent, was also deposited with the 2nd respondent for the purpose of issuance of purchase order after negotiation on the price issue. After all these events,