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2023 Supreme(Kar) 108

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
Karnataka Commercial and Industrial Corporation Pvt. Ltd. - Petitioner
Versus
State of Karnataka, Represented by the Director of Horticulture Department of Horticulture & Ors. - Respondents
Writ Petition No. 5449 of 2023 (GM – TEN)
Decided On : 16-05-2023

Advocates Appeared:
For the Petitioner:Sri Udaya Holla, Sr. Advocate a/w Sri Rajendra M.S.
For the Respondents: Sri R. Subramanya, AAG a/w Sri B.V. Krishna, AGA, Sri K. Kiran Kumar.

Point of Law: Section 14 of Act reads as general rejection of tenders.

Headnote:

Companies Act, 1956 - Karnataka Transparency in Public Procurements Act, 1999 - Section 14 – Constitution of India, 1950 - Article 226, 14 - Tender - Service for collection of entry fee - Petitioner is calling in question notification by which 2nd respondent has called for a fresh Request for Proposal to provide service for collection of entry fee and vehicle parking fee at Lalbagh gardens for a period of two years – State cannot justify on issue of price which was never projected in any of notices inviting tenders - Para 15.

Finding of the Court:

Tender Inviting Authority has, with eyes wide open, not once but twice has called for tender indicating a particular price - Now completely contrary to Section 14, an order of fresh tender is issued in blatant violation of every tenet of Section 14 - State cannot justify on issue of price which was never projected in any of notices inviting tenders - Therefore, action of State cannot but be termed to be arbitrary - There is not a line communicated to tenderers with regard to rejection of tender - Elaborate deliberation that is now passed over at time of hearing does not inspire any confidence of Court, for it to be in consonance with law - No doubt State has power to withdraw tender and call for fresh tender - Such action should not be arbitrary - If aforesaid action is permitted, there will be no end to State issuing tender, recalling it and re-tendering same work - Apex Court holds that basic requirement of Article 14 is fairness in action by State and not arbitrariness is essence and substance of fair play - Therefore, facts in case at hand become an appropriate subject matter for exercising judicial review and obliterating impugned action of issuance of a fresh tender notification.

Result: Petition allowed.

ORDER :

The petitioner is before this Court calling in question notification dated 21-02-2023 by which the 2nd respondent - Deputy Director of Horticulture, Lalbagh has called for a fresh Request for Proposal (Notice Inviting Tender) to provide service for collection of entry fee and vehicle parking fee at Lalbagh gardens for a period of two years.

2. Facts adumbrated are as follows:-

The petitioner claims to be a private limited company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of manpower services and various other services incidental to and that of collection of entry fee from visitors in various establishments. It is the claim of the petitioner that the petitioner has provided services relating to parking fee and entry fee aspect at Lalbagh, Metro Station and Airport. On 29-09-2022 the 2nd respondent - Deputy Director of Horticulture, the competent authority floats a tender by issuance of Request for Proposal (hereinafter referred to as ‘the tender’ for short) calling for bids to provide service for collection of entry fee and vehicle parking fee at Lalbagh for a period of two years. It was said to be a two cover tender. The tender was called for to expect revenue of Rs.3.49 crores per year. Considering itself to be eligible in terms of the conditions stipulated the petitioner submits its bid. The petitioner was declared technically qualified and his financial bid was opened which quoted Rs.7,62,60,000/- for a period of two years. The Tender Scrutiny Committee found that except the bid of the petitioner no other tenderers’ bid was responsive as none of them were technically qualified. It is, therefore, the petitioner became the sole bidder. In the light of it becoming the sole bidder and it being contrary to competitive bidding, the respondents did not proceed further with the tender notification.

3. Then comes second tender on 05-12-2022 again calling for bids for the same purpose. The petitioner again submits its bid on 12-12-2022. It quoted the price at Rs.7,69,60,000/- this time, which was a little higher than the earlier quote. This time there were four bidders. The technical bid of all the bidders were considered by the Tender Scrutiny Committee and two bids were found to be responsive and those were the bids of the petitioner and one Omega Enterprises. Among the two, the petitioner’s bid was the highest at the figure quoted hereinabove and it was declared to be H1.

4. On 07-01-2023 the Joint Director, Lalbagh addresses a communication stating that the financial bid of the petitioner has been responsive and he has been declared as H1 and calls the petitioner for a meeting with the Tender Scrutiny Committee to have negotiation for increase in price quoted by the petitioner. The representative of the petitioner attended the meeting on 07-01-2023. The petitioner agrees for increase of price up to 11% more than the minimum expected price in the tender. The claim of the petitioner is that the Tender Scrutiny Committee was satisfied with the revised price quoted by the petitioner and the petitioner was given to understand that it accepted the offer of the petitioner and addressed a letter to the State Government seeking approval for award of tender in favour of the petitioner. All that remained in the entire process was award of contract to the petitioner.

5. On 21-02-2023 when the petitioner was expecting the award of contract, what comes about is the impugned tender notification/re-tender notification on 21-02-2023, the third in line. The tender now indicated that the expected revenue should be more than Rs.9/- crores for two years. Challenging this issuance of third tender notification for the same purpose notwithstanding the fact that the petitioner was declared to be H1 in the earlier tender notification, the petitioner has knocked at the doors of this Court in the subject petition. This Court in terms of its order dated 07-03-3023 directed the parties to maintain status quo

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